A doctor
Health care providers have submitted far more independent dispute resolution (IDR) challenges under the federal No Surprises Act than anticipated – and they have won the vast majority. In fact, providers won 85% of the line-item claims decided in 2024, up from 81% in 2023.
“When providers win, they typically receive fees that are 3 to 4 times the typical in-network rate, as reflected by the qualifying payment amount,” according to the Center for Health Insurance Reforms at Georgetown University.
The No Surprises Act was enacted to protect consumers from unexpected medical bills,
especially in situations in which they receive care from out-of-network providers. The IDR process is a mechanism established under the act to resolve payment disputes between out-of-network providers and health plans.
In rules establishing IDR, federal agencies estimated that the process would resolve around 17,300 disputes annually. But in the nine months after IDR began in 2022, roughly 190,000 disputes were filed, which was more than 10 times the number regulators expected in a full year. That pace hasn’t let up since, leaving regulators with a backlog of nearly 500,000 disputes as of May.
“The high volume of IDR disputes is generating significant spending from administrative costs and higher payments for services,” the center reported. “This higher spending will likely be reflected in higher overall health costs and consumer premiums in the future. By estimating administrative and payment costs, we find the IDR process has generated at least $5 billion in total costs through the end of 2024.”
Researchers analyzed several factors that have contributed to the high costs. Since the start of the IDR process, the system has collected $218 million in administrative fees (plus $10 million for air ambulance disputes). These fees go to federal agencies to support system administration.
Combining required fee payments, administrative costs and additional payments for services, the IDR process has generated at least $5 billion (about $2 billion to $2.5 billion annually) in total costs through the end of 2024. Over the last two years, these costs have been driven by a high volume of disputes and high provider use of IDR, primarily by private equity-backed groups.
“These trends prompt the question of whether steps should be taken to reduce IDR use and the size of the awards and what policy levers are available,” the report said. “The No Surprise Act successfully protects consumers from higher out-of-pocket costs associated with surprise bills and out-of-network cost sharing. But without action to rethink the IDR process, the high costs will add to overall health system costs and will ultimately by paid by consumers.”
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