In the ongoing struggle to achieve clarity around how Surprise Billing regulations will work, the Centers for Medicare and Medicaid (CMS) opened a Federal IDR Portal in late April to guide resolution of out-of-network rate disputes between payers and providers after direct negotiations fail. As the saying goes, “the devil is in the details.” This process represents the last resort for payers and providers if they can’t come to rate agreements on their own.
The portal reflects revised guidance independent arbiters can use in the Independent Dispute Resolution (IDR) process and what information they shall consider when choosing between two prices – one offered by the provider and one by the payer. The arbitration method is known as the “Major League Baseball” approach – both parties make offers and an independent arbiter determines which price prevails. The arbiter must choose one award without modification, so whichever number is chosen is final.
Some of the variables the independent arbiter must consider are:
- The Qualified Payment Amount (QPR) for the relevant service. In general, this is the median of the contracted rates, factoring in geography, specialty and inflation. The methodology for this was established in the CMS July 2021 interim final rules.
- Other credible information as submitted by either party that is not prohibited and is relevant to the offers made.
- IDR arbiters may also consider, for non air-ambulance services, the level of training and outcomes for the provider; the provider or facility market share; patient acuity and service complexity; the facility’s teaching status, case mix and scope of services; a demonstration of good faith or lack thereof in attempts to reach a contract.
Factors that the IDR must not consider include:
- “Usual and customary charges,” including when expressed as a percentage or share of same
- The amount that the provider would have billed were key rules (45 CFR 149.410, 149.420, and 149.440 as applicable) not applied.
- The reimbursement rates for most public payers, including Medicare, Medicaid, CHIP and TRICARE. The same rule applies as above for figures expressed as percentages or shares of those rates.
The rules are both similar and different for air ambulance services. In that case, additional variables an IDR arbiter may consider are the type of air ambulance vehicle and its level of clinical capability, and the population density at the point of pickup for the patient.
The IDR entity has 30 days to notify the involved parties in the dispute of their decision. The non-prevailing party must also cover the costs of the IDR services.
Note: Please reference the Independent Dispute Resolution link for complete guidance. This blog post is a partial summary and does not represent legal advice.