The No Surprises Act: Surprise Medical Billing Dispute Process

The No Surprises Act is a federal law enacted January 1, 2022 that holds a covered patient harmless for any costs incurred above the patient’s in-network cost sharing obligation when receiving certain out-of-network medical services and items. Under the No Surprises Act, patients are protected against surprise medical bills that occur when a patient receives care from an out-of-network provider, most notably when receiving emergency medical services from out out-of-network provider at an in-network or out-of-network facility.  It also protects patients from surprise medical bills when receiving non-emergency medical care at an in-network facility unless the provider meets certain notice and disclosure requirements, and the patient has consented to waive balance billing protections and cost-sharing restrictions.

How are payments calculated for out-of-network providers under the No Surprises Act?

The qualifying payment amount (QPA) also known as the median of the contracted (or in-network) rates1 recognized by the plan or issuer for the same or similar item or service2 is the basis for the initial payment made for services (and/or items) rendered by an out-of-network provider in specific circumstances and is one of several factors that arbitrators are instructed to consider when determining the amount for items and services the provider should be paid under the NSA independent dispute resolution (IDR) process.

What is the Independent Dispute Resolution (IDR) process?

The IDR process is a provision under the No Surprises Act that establishes a process for resolving payment disputes between providers and payors through “baseball” style arbitration. The Federal Departments of HHS, Labor and Treasury are responsible for the rulemaking process that determines the manner in which the law is implemented, including how payments due to non-participating or out-of-network providers should be calculated and how payment disputes will be initiated and handled.

How are payment disputes resolved under the No Surprises Act IDR Process?

The insurance company has 30 days after the provider submits a claim to issue an explanation or benefits (EOB) with a payment or notification of a denial. Subsequently there is a 30-business day window for the payor and the provider to engage in a good faith “open negotiation”. Either party may initiate the IDR process within 4 business days of the expiration of the open negotiation period if a settlement has not reached.  Both parties must agree on a certified IDR entity for handling the arbitration process and once determined each party has 10 business days to submit final payment offers to the IDR entity.  Subsequently the IDR entity will select the offer that best represents the value of the item or service based on the arbitration submissions and supporting documentation within 30 business days with payment to be made to the prevailing party 30 calendar days later.

Identifying Surprise Bill Claims

As of January 1, 2023 many out-of-network providers claims will be subject to either the Federal No Surprises Act or a State-specific balance billing law.  Insurers have the responsibility of notifying the provider whether the adjudication process has found the claim to be subject to a surprise bill law and this should be identified in the Remark Codes of the  Explanation of Benefits (EOB) or via the 835 electronic remittances. 

How much does it cost to dispute a claim under the NSA IDR?

As of January 2, 2023,  the non-refundable administrative filing fee paid to the Federal government to initiate the IDR process  is $350 for each party.     The fee for the certified arbitrators services in handling the dispute can vary generally $200-$700, set by the IDR entity.  Arbitrations are submitted for consideration at the CPT Code level — thus one surgery could potentially have multiple arbitrations being initiated at the same time. 

What information do IDR entities use to determine the appropriate payment amount?

According to the No Surprises Act, factors certified IDR entities must consider in determining which offer or payment amount to select:

  • The Qualifying Payment Amount (QPA)
  • The level of training or experience of the provider or facility
  • The quality and outcome measurements of the provider or facility
  • The market share held by the OON provider or facility by the plan or insurer in the geographic region in which the item or service was furnished
  • The patient acuity and complexity of services furnished
  • The teaching status, case mix and scope of services at the facility
  • Any good faith effort — or lack thereof – to join the insurer’s network
  • Any prior contracted rates over the previous four plan years

No one factor is given more weight than another in the decision-making process based on recent Court orders3.

We’re here to help.  Call us today.

Our team has been successfully handling the IDR arbitration process for surprise bill claims on behalf of our clients.  Please call us to learn more about how we can help maximize reimbursements for your practice too. Whether your billing operations are internal, partially outsourced or fully outsourced, we can work with you at any point in the RCM process to pursue an appropriate reimbursement for services rendered.

1 as of January 31, 2019, adjusted for inflation.

2 in the same geographical area and in the same or similar specialty. Federal law defers to the state law where

3Memorandum Opinion and Order 6:21-cv-00425

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