Proposed rule on surprise billing disputes a step in right direction

It has been a busy couple of months in the complicated saga of the rules governing how payers, physicians and others resolve disputes over payment for unanticipated out-of-network care, often called surprise billing.

Among the latest goings on:

• The federal independent-dispute resolution (IDR) portal is open again.
• There are some positive changes in the most recent proposed rules surrounding the No Surprises Act that Congress passed to protect patients from surprise medical expenses when they receive care at a facility outside their insurance network or from out-of-network physicians or other clinicians at an in-network hospital, ambulatory surgery center or freestanding emergency department.
• There’s still more work to be done to improve upon the most recent proposed rules, items that the AMA outlined in a Jan. 2 letter (PDF) to secretaries of the Departments of Health and Human Services, Labor and Treasury.

“While we cannot support everything proposed in these rules, we recognize many of the proposals reflect policies for which we have been advocating and appreciate the departments’ consideration of our input,” the AMA letter says. “If finalized, the proposed rules will be an important step in the right direction toward improving the dispute resolution process for physicians and all interested parties.”

The government reopened the federal IDR portal Dec. 15 to process all dispute types, including previously initiated batched disputes, new batched disputes and new single disputes involving air ambulance services.

The portal was down for several months prior to that, and because of the disruption the government extended IDR-initiation deadlines for several types of disputes.

For example, if an IDR initiation deadline under applicable regulations fell anytime between Aug. 3, 2023 and Dec. 14, 2023, when IDR operations were temporarily suspended, parties who want to file a dispute will have until March 14 to initiate a new batched dispute or a new single dispute involving air ambulance services.

A final rule that the Centers for Medicare & Medicaid Services (CMS) issued Dec. 18 raised the administrative fee effective Jan. 22.

Disputes filed on or after Jan. 22 now face a $115 administrative fee per party, per dispute. The certified IDR entity fee ranges from $200 to $840 for single determinations and $268 to $1,173 or more for batched determinations depending on the number of line items.

The administration previously sought to raise the administrative fee to $350 through guidance but a court struck it down after the Texas Medical Association (TMA) sued, one of several lawsuits the TMA has filed challenging surprise billing. The Litigation Center of the American Medical Association and State Medical Societies filed amicus briefs in some of the cases.

The proposed rule incorporates many things that the AMA and other medical societies have long been championing (PDF) through letters (PDF) and other channels.

In its most recent Jan. 2 letter, the AMA recognized that it supports the departments’ proposal to require:

• That health plans use Claim Adjustment Reason Codes (CARCs) and Remittance Advice Remark Codes (RARCs) when providing the initial payment or notice of denial.
• The initiating party to provide the open negotiation initiation notice to the non-initiating party via the federal IDR portal. The AMA discourages the departments from collecting any associated administrative fee for using the portal.
• A response and counteroffer to open the negotiation initiation notice.
• That IDR-entity fees be returned in full if the parties reach a settlement before the IDR entity makes an eligibility determination.

The AMA also supports the proposed rule’s plan to allow services furnished to a single patient during the same encounter to be batched together.

There is still more work that needs to be done (PDF) to ensure that plans pay physicians after an IDR decision, that the IDR process is accessible to all physicians, and that the qualifying payment amount (QPA) is more reflective of median rates.

 The AMA’s letter encourages further changes to the proposed rule. These include:

• Departments using their statutory waiver authority to limit the 90-day cooling off period to as short a time frame as possible—one day.
• Not limiting the line items that can be batched together to 25 items. The AMA believes that may negate some of the efficiencies and cost saving associated with the proposed batching expansion.
• Keeping the flexibility for resubmitting inappropriately batched claims, at least until the impact of proposed changes to the rule can be fully evaluated. Foregoing this flexibility could have a significant financial impact on physicians who continue to struggle to navigate the changing batching rules.
• Recognizing that the complexity of the IDR process and changing requirements will continue to lead to good-faith mistakes related to eligibility and to consequently offer initiating parties the same discounts for ineligible claims as noninitiating parties.

Visit AMA Advocacy in Action to find out what’s at stake in creating fairness in surprise-billing disputes and other advocacy priorities the AMA is actively working on.