As a result of the most recent provider lawsuit, IDR processing fees have been reworked.
Since its inception on Jan. 1, 2022, the No Surprises Act (NSA) has had its growing pains, including four lawsuits challenging the process of Independent Dispute Resolution (IDR). Out-of-network services are paid for with this process when health plans, healthcare providers, and air ambulance services cannot agree on a payment rate. After determining the final amount of payment, a certified IDR entity resolves the dispute by reviewing the specifics of the dispute, including the items or services received.
According to Texas Medical Association, et al., the process is handled improperly and fees are assigned incorrectly. In a lawsuit filed against the U.S. Department of Health & Human Services, et al. (TMA IV), the IDR admin fee was raised from $50 to $350 without adequate notice or comment. A provider’s ability to batch claims together was also restricted by the Departments of Health and Human Services, Labor, and Treasury. Providers with mostly low-dollar claims were unable to utilize the dispute process because of this limitation, combined with the fee increase, according to the lawsuit.
On Dec. 18, 2023, the Departments released the final rule on the Federal Independent Dispute Resolution (IDR) Process Administrative Fee and Certified IDR Entity Fee Ranges in response to the TMA IV decision in favor of the providers. New fees associated with the IDR process were finalized on December 18, 2023.
Non-refundable administrative fees must be paid by both parties in the IDR process. Based on the estimated government expenses for the IDR process divided by the estimated total number of administrative fees paid in the year, the Departments determined a more equitable fee. In the end, the Departments settled on $115 per party per dispute after discovering that $50 didn’t cover the costs of running the IDR process and portal, whereas $350 was too expensive for providers.
“Upon consideration of feedback,” announced the Centers for Medicare & Medicaid Services, “the final rule updates the administrative fee calculation method. Instead of estimating administrative fees based on the number of disputes closed, we will now calculate the estimated total based on the projected administrative fees paid to certified IDR entities (which will be remitted to the Departments).To calculate the Federal IDR fee, the estimated expenditures are based on costs to the Departments for maintaining, operating, and improving the Federal IDR portal. Responding to comments calling for more stable administrative fee amounts, the final rule sets a limit of one fee update per year, occurring only once per calendar year.”
Starting Jan. 22, 2024, the $115 admin fee applies to disputes initiated after this date.
Certified IDR Entity Fees:
The Departments require each IDR entity to submit an annual fee agreement for its payment determinations. There is a fixed fee for single payments, and a fixed fee for batch payments. The following IDR entity fee determinations, effective starting January 22, have been established by the Departments based on the TMA IV opinion and order:
- $200-$840 for single determinations; and
- $268-$1,173 for batched determinations.
The fee for each increment of 25 dispute line items included in a batched dispute, starting with the 26th, may be set by certified IDR entities within the range of $75-$250.
The above IDR entity fee ranges will only be updated once a year, just as the admin fee ranges will be updated once every year. In addition, certified IDR entities are permitted to request the Departments’ approval to update their fees one additional time per calendar year.