Compliance Corner

Federal Updates

HHS Releases Federal Independent Dispute Resolution Process Guidance Document

November 08, 2022

HHS recently released an updated federal independent dispute resolution (IDR) process guidance document. The agency issued the guidance document for group health plans and insurers who are seeking to resolve a payment claim for items and services covered by the surprise billing protections under the No Surprises Act (NSA) of the Consolidated Appropriations Act, 2021 (CAA, 2021).

The NSA provisions apply to both insured and self-funded group health plans and are effective for plan years beginning on or after January 1, 2022. The NSA provisions protect participants from surprise bills for out-of-network (OON) emergency and air ambulance services, as well as certain OON services received at in-network facilities. The NSA limits participant cost-sharing for covered OON services, leaving plans and insurers to address the balance of the bill from an OON provider or facility. In states with an applicable All-Payer Model Agreement or specified state law (which generally applies to fully insured plans), the OON provider rate is determined by the All-Payer Model Agreement or state law. Otherwise, if a plan or insurer and provider cannot agree on the OON payment amount after a 30-day negotiation period, then either party can initiate the federal IDR process.

The guidance document follows the issuance of final rules in August regarding the NSA surprise billing requirements and federal IDR process. The final rules modified prior guidance on the federal IDR process after a Texas court found the prior guidance inconsistent with the CAA, 2021 statutory language. Please see our prior articles on the August 2022 final rules and February 2022 court ruling.

Under the final rules, the arbitrator in the federal IDR process (termed the “certified IDR entity”) must select the offer of the disputing party that best represents the value of the OON item or service under dispute after considering the qualifying payment amount, which is the median contracted rate for the item or service in the geographic region, as well as all permissible additional information submitted by the parties. Such additional information may include, for example, the level of training, experience, and quality and outcomes measurements of the provider, or the complexity of providing the service to the participant. The final rules also require certified IDR entities to explain their payment determinations and underlying rationale in a written decision submitted to the parties.

Accordingly, the guidance document provides detailed information about the federal IDR process that incorporates these changes from the final rules. The IDR process is conducted through the federal portal designed for this purpose. The guidance document explains the specific steps in the process, such as how the disputing parties engage in open negotiation prior to the federal IDR process, initiate the federal IDR process, and select a certified IDR entity. This information is summarized in helpful charts that include the applicable timeframes for each step and links to required notices. Instructions are also provided regarding submissions of offers and IDR fee payments, among other items.

Employers that sponsor group health plans, particularly those that sponsor self-insured plans, should be aware of the updated federal IDR process guidance document, which applies to all items and services covered by the NSA that are provided on or after October 25, 2022 (for plan years beginning on or after January 1, 2022). Items and services that are furnished before October 25, 2022, are subject to a prior guidance document. HHS may issue additional guidance in the future to address specific questions or scenarios submitted by the public.

Federal Independent Dispute Resolution Process Guidance for Disputing Parties »