Federal regulators have completed a long-anticipated update to the No Surprises Act’s Independent Dispute Resolution (IDR) process. The most significant change is the administrative fee to initiate a dispute, which has dropped from $115 to $15 per party. The updated rule, finalized in late May, also requires health insurers to use standardized claim adjustment codes. This change allows medical practices to quickly determine whether a claim qualifies for federal arbitration.
Insights from the Medical Group Management Association (MGMA)
To unpack the implications of these changes and highlight ongoing challenges, Physicians Practice consulted with a representative from the Medical Group Management Association (MGMA). This representative has long advocated for a more transparent and accessible dispute process, viewing the recent updates as a meaningful, though incomplete, improvement.
This discussion has been edited for clarity and brevity.
What is the No Surprises Act IDR process, and why is it important for practices?
The IDR process was established as part of the No Surprises Act, a crucial piece of legislation aimed at protecting patients from unexpected medical bills. The process is applied when a patient receives care at an in-network hospital from an out-of-network physician, leading to disputes over payments. The intent is to avoid situations where patients face significant, unforeseen costs.
This process became more important after the Affordable Care Act, as many insurers narrowed their provider networks, forcing certain specialists—such as those in emergency medicine, radiology, pathology, and anesthesia—out of network, even when working at in-network hospitals. The goal is to make the dispute process as straightforward as possible for medical practices.
While rare cases of abuse exist, the MGMA’s focus remains on establishing a fair, transparent system that ensures appropriate compensation for medical practices treating patients in these scenarios.
Does the new IDR rule address core concerns for medical groups?
The updated rule takes significant steps forward, notably by reducing the administrative fee to $15, which is especially beneficial for smaller or independent practices. Additionally, the requirement for standardized claim codes brings much-needed clarity. Insurers must now include specific remittance advice codes when a claim is denied or underpaid, indicating if it falls under the No Surprises Act. This helps practices quickly determine eligibility for federal arbitration.
What was the impact of delays in finalizing this rule for practices?
Delays in finalizing the rule meant that practices continued to pay the higher $115 administrative fee, creating unnecessary financial strain. The lack of transparency also resulted in confusion, with some practices submitting claims that were ineligible for the IDR process. These issues are now largely resolved with the recent changes.
Where does administrative burden remain in the IDR process?
Despite improvements in transparency—thanks to the requirement for Claim Adjustment Reason Codes (CARC) and Remittance Advice Remark Codes (RARC)—the process remains cumbersome. Practices must still use a designated portal to submit disputes, and further reforms are needed to simplify this step.
Another ongoing challenge is enforcement and timely payment. Even when providers win disputes (which occurs over 80% of the time), payment from insurers is not always forthcoming. Additional reforms are necessary to ensure that prevailing providers receive timely compensation. Improvements to the submission portal and stricter enforcement mechanisms are still needed.
Insurers argue the rule does not prevent ineligible claims. What is MGMA’s perspective?
While some extreme cases are reported, these are rare. MGMA emphasizes the need for a fair process for most providers, who are seeking reasonable compensation. The high rate at which providers prevail in IDR cases suggests that insurers should do more to align payments with in-network rates and avoid unnecessary disputes. The current improvements are a step forward, but more changes—particularly regarding timely payment—are still necessary.
Beyond the fee reduction, how will these changes affect daily operations for medical practices?
For most practice administrators, the IDR process will not be a routine concern. However, for administrators in emergency medicine, anesthesia, and radiology, where out-of-network billing is more common, the updates are significant. The lowered fee and enhanced clarity make it easier to appeal payment denials and pursue arbitration where appropriate. The process allows for a 30-day negotiation period, after which arbitration can be pursued if necessary. The system’s “baseball-style” arbitration frequently results in favorable outcomes for providers making reasonable claims.
Does this rule signal broader regulatory changes, and what should practices monitor going forward?
While the rule is a positive development, it does not necessarily indicate further regulatory changes in unrelated areas. Continued legislative and enforcement improvements are needed, especially to support providers who win arbitration but struggle to collect payment. MGMA continues to advocate for reforms that ensure fair treatment and prompt payment for care provided to in-network patients.
Source: No Surprises Act IDR rule