No Surprises Act IDR gets major overhaul from CMS

Faster eligibility determinations to reduce IDR backlog

The final rule will address one of the biggest IDR bottlenecks -- a high volume of ineligible claims that have flooded the system, leading to determination delays and a massive backlog of disputes.

CMS said in the press release that over 5 million disputes have been submitted to the federal IDR process since its launch in April 2022, creating a massive backlog of cases. About 40% of those disputes are ineligible for the process, though, claims America's Health Insurance Plans.

Certified IDR entities will now have to determine eligibility within five business days of being assigned to a case and notify both parties and the relevant federal departments, according to the final rule.

Transparency for payer claim communications

The rule also seeks to improve communication between payers and providers, which they say has been neither direct nor clear.

Payers and providers entering the IDR process will soon need to provide additional information if requested by the IDR entity within five business days to expedite eligibility determinations, conflict of interest reviews and payment determinations.

Failing to meet the deadline will result in IDR entities moving forward with a decision without the information or closing the dispute.

Payers will also have to better communicate claim eligibility to out-of-network providers, according to the rule.

The rule will require payers to include claim adjustment reason codes and remittance advice remark codes on any remittance advice it sends to providers outside their networks. These codes generally explain how payers adjudicated a claim, including why a claim was denied, reduced or paid differently than billed.

The applicable CARCs and RARCs will indicate whether a claim for an item or service furnished by an out-of-network provider is or is not subject to the federal IDR process, CMS said.

Payers will also need to include more information when paying or denying claims, including legal business names of coverage carriers and a new registration number that payers will need to get to participate in the IDR process moving forward.

The number will be part of a new IDR registry established by the rule, which will contain information on the application of the process to items and services covered by the plan.

Additionally, payers will need to modify language in their disclosures to out-of-network providers to better facilitate the open negotiation period.

Stricter rules for the open negotiation period

Under the NSA, payers and providers have 30 business days to negotiate a payment rate for items or services before submitting the claim to the IDR process. However, this isn't always happening in good faith, according to payers and providers.

Parties will have to provide an open negotiation notice to the other party and relevant federal departments through the federal IDR portal to initiate the open negotiation period, the rule states.

The rule also specifies that the 30-business-day period starts when the party submits the notice, along with the payment remittance or a notice of denial, to the portal.

Parties that receive an open negotiation notice must also respond by the 15th business day of the open negotiation period.

CMS said in the rule that these changes will provide more transparency into the process by ensuring parties know when the open negotiation period has started, which could also reduce the number of ineligible claims.

Expanded batching criteria to streamline IDR disputes

Batching has also been a major sticking point within the IDR process. Payers and providers have complained that strict rules have forced patient encounters into multiple arbitrations, adding to the backlog and driving up administrative costs.

The Texas Medical Association sued the federal government in 2023 over the restrictive batching rules and a 600% increase in an administrative fee implemented earlier that year. TMA won the case, with a judge vacating the "same service code" batching restriction.

The final rule officially expands batching criteria for payers and providers. It will allow qualified IDR items and services to be batched under three circumstances, as follows:

• If they are furnished to the same patient in a single day or consecutive days and billed on the same claim form.
• If they are furnished to one or more patients and are billed under the same service code or a comparable code across coding sets.
• Anesthesiology, radiology, pathology, and laboratory items and services furnished to one or more patients under service codes belonging to the same Category I CPT code section.

The rule also finalized a limit on batched determinations to 50 qualified IDR items and services per dispute to streamline the process.

IDR administrative fees drop 85%

Administrative fees will also fall to $15 per party per dispute from $115, the rule adds. If a party does not pay, the rule also says the IDR entity will not consider their offer and the federal government may collect any unpaid fees.

The Trump administration plans to enact the new fee structure as soon as five days after the final rule's publication. Other provisions, including the addition of CARCs and RARCs, will take effect two months after the rule's publication, while new batching requirements will launch within 90 days.

The rule's publication date has not been announced yet, but it usually takes several days to two weeks.

Jacqueline LaPointe is an Executive Editor at Xtelligent Healthcare Media, covering revenue cycle management, healthcare payers, health policy, and health IT since 2016.