Providers Prevail in Vast Majority of Independent Dispute Resolution Cases

The U.S. Departments of Health and Human Services, Labor and Treasury recently released data files detailing the usage of the federal independent dispute resolution (IDR) process for the first six months of 2023. The IDR process was initiated by the No Surprises Act and is intended to be a tool for providers and payers to determine appropriate payments for certain out-of-network services without putting the patient in the middle.

The data provided by the departments illustrates that providers prevailed in more than three quarters of initiated disputes, a strong indication that payers involved in the disputes are underpaying providers for out-of-network services. In addition, the prevailing offer was higher than the qualifying payment amount (QPA) in more than 80% of determinations. The QPA is the median in-network rate as calculated by payers based on 2019 payment rates and adjusted for inflation. The calculation methodology as outlined in rulemaking in July 2021 was flawed and led to a lawsuit by the Texas Medical Association. The court agreed and overturned several regulatory provisions related to the QPA calculation; however, the government has appealed this decision.

The majority of IDR cases were related to emergency services, while imaging services represented approximately 17% of federal IDR disputes in the first six months of 2023. The median prevailing offer for imaging services was more than 300% of the QPA, illustrating the flaws in the QPA calculation methodology.

The departments indicate that the volume of disputes initiated in the first six months of 2023 was far greater than anticipated and determining whether the disputes were eligible for federal IDR was extremely complex. The departments issued new proposed rules for the IDR process operations in October and anticipate technical and operational improvements to the process that will make it more efficient when the rules are finalized. The American College of Radiology® (ACR®) submitted comments on these proposals in December.

The ACR continues to work with the departments to ensure the No Surprises Act is implemented as intended, protecting patients from surprise bills and making sure providers have the opportunity to negotiate adequate in-network and out-of-network payment rates. Inaccurate and artificially low QPAs lead to lower in-network payment rates and make contract negotiations difficult for providers. Additionally, providers of low-dollar claims should not face financial barriers to the IDR process in the form of high administrative fees.

For more information or if you have questions, contact Katie Keysor, ACR Senior Director of Economic Policy.