The Biden Administration’s Proposed IDR Rules

On October 27, 2023, the Biden Administration released a proposed rule on the No Surprises Act’s (“NSA”) Federal independent dispute resolution (“IDR”) process.  The IDR process has been mired in litigation since the enactment of the NSA, which is enforced by the Departments of Health and Human Services, Labor, and the Treasury (the “Departments”), along with the Office of Personnel Management.

The NSA protects consumers from surprise billing for emergency and, out-of-network healthcare services (“OON”), including OON air ambulance services. The law requires that payers (often health plans) and providers resolve payment disputes exclusively through the IDR process. If the payment dispute cannot be initially resolved through informal negotiation during a 30-day period, either party may elect to have a certified IDR entity (arbitrator), decide the payment dispute through baseball style arbitration.

The proposed IDR rule, if finalized, would, in part, improve communications between payers, providers. We intend to address other important provisions of the proposed rule in subsequent blogs.

Part 1: Communication Between Payers and Providers

The Departments are proposing that payers be required to provide additional information at the time of initial payment or notice of denial of payment. The Departments believe that an early and critical exchange of information between disputing parties occurs when a payer, in response to a submitted claim that may be subject to the NSA, sends a provider either an initial payment or a notice of denial of payment. At that time, the payer must disclose to the provider important information about the claim, including the qualifying payment amount (QPA) and contact information for initiating the open negotiation period. This information helps parties decide whether they would like to contest the initial payment or notice of denial of payment and begin to assess whether the claim in question is eligible for the Federal IDR process.

Additional Information

• The Departments are proposing to require that payers provide additional information at the time of initial payment or notice of denial of payment, including the legal business name of the plan (if any) or issuer, the legal business name of the plan sponsor (if applicable), and its IDR registration number, further described under the “IDR Registry” section of this fact sheet.

Disclosure Statement

• The Departments further propose to require payers to include in these disclosures a statement explaining that providers must notify the Departments to initiate open negotiation, as described in the “Open Negotiation” section of this fact sheet.

Standardized Codes

• The Departments propose to require that payers use standardized codes to communicate whether a claim for an item or service furnished by an out-of-network provider or facility is or is not subject to the NSA’s surprise billing provisions and the Federal IDR process.

Claim Adjustment Reason Codes

• Additionally, the Departments propose to require payers to communicate information to providers by using specific claim adjustment reason codes (CARCs) and remittance advice remark codes (RARCs), to be specified in guidance, when they provide any paper or electronic remittance advice to an entity that does not have a contractual relationship with the payer. Payers would provide the applicable CARCs and RARCs to communicate information related to whether a claim for an item or service furnished by an out-of-network provider or facility is or is not subject to the NSA’s surprise billing provisions and eligible for the Federal IDR process. The guidance specifying specific CARCs and RARCs would be distinct from the list of NSA-related RARCs effective on March 1, 2022, which would remain available for voluntary use by payers.

These proposed changes are intended to benefit all disputing parties and reduce the number of ineligible disputes that are submitted to the Federal IDR process. Please continue to visit our blog for more information on the proposed rules.

Contact 6 Degrees Health compliance team with any questions.