Skip to content

AV Submits Letter on the Proposed Rule on Operations of the No Surprises Act’s Independent Dispute Resolution Process

Arnold Ventures provided comments to the Departments of Health and Human Services, Labor, and Treasury on a proposed rule to help address key challenges with the No Surprise’s Act’s Independent Dispute Resolution process.

Prior to the enactment of the No Surprises Act (NSA), millions of privately insured Americans received unfair and costly surprise medical bills. These unexpected and exploitative bills occurred when patients received care from out-of-network providers in situations where they usually had no control in selecting the clinician. To determine payments for this type of surprise, out-of-network care when provider and plan negotiations are unsuccessful, the NSA established an Independent Dispute Resolution (IDR) process. 

The NSA aimed to both protect patients from these expensive surprise medical bills and lower health care costs. When the law was enacted, the Congressional Budget office projected it would lower consumers’ premiums by 1% and reduce the federal deficit by $17 billion over 10 years. 

Over time, challenges to implementation, driven by more than 20 lawsuits and potential overuse and abuse of the process by private-equity backed entities and provider organizations who were benefiting from surprise medical bills, threaten to undermine the law’s protections and ability to reduce health care costs for American families, employers, and taxpayers. 

For example, a higher-than-anticipated amount of claims have been submitted to the IDR process, including many ineligible claims, suggesting that certain predatory actors (such as powerful physician staffing companies, financial management firms, and private-equity backed providers) may be intentionally flooding” the IDR process to create challenges within the system. Other inefficiencies in the use of the process have also contributed to challenges in implementing the NSA. New data released by the administration also shows that payment determinations made in the IDR process are most often in favor of the providers, and are often substantially higher than in-network negotiated rates. This may ultimately result in less savings than initially projected and could even result in increased premiums for consumers and employers. 

Strengthening the IDR process can help protect patients and limit health care costs 

With the proposed Federal Independent Dispute Resolution Operations rule, the administration is taking important steps to help address operational challenges presented by the IDR process and the current volume of claims the system faces. The proposed changes are aimed at reducing inappropriate use of the IDR process, making it more routine, and limiting the administrative burden and resources needed to engage with the process – all of which should help limit health care costs associated with said burden. 

The administration is proposing important and reasonable changes to strengthen the IDR process including: 

  • Streamline eligibility determinations and add additional capacity (via the Departments) to review claim eligibility, which should help reduce the backlog of claims and limit future ineligible claims; 
  • Clarify the timelines and disclosures embedded in the IDR process, which should help to ensure it moves efficiently and administrative burden is limited; and 
  • Strengthen the use of the open negotiation process between plans and providers prior to the initiation of the IDR process, as this is an important step that, when used regularly, should be helpful in reducing the use of the IDR process itself. 

Protecting against abuses

While the provisions noted above are intended to strengthen the IDR process, the proposed changes to reduce the administrative fee for lower-dollar disputes could actually increase the number of claims submitted, further exacerbating the volume of claims moving through the process. While we recognize that smaller or independent providers may be disadvantaged in using the IDR process, AV strongly suggests maintaining a standard administrative fee for all eligible disputes (regardless of claim amount) that balances appropriate access to the IDR process while limiting potential overuse of the system. 

As work to strengthen the NSA continues, the administration should continue to defend the law against efforts from powerful hospital, physician, and private equity backed groups working to weaken it. 

Read the full letter here.