Health claim experts eye the new No Surprises Act boxing rings

Providers and payers are now supposed to take 30 days to make a serious effort to resolve disputes through an "open negotiation" process before the IDR entities swoop in.

The regulation drafters seemed to devote a lot more words to explaining how employers' self-insured health plans and other payers should register for the new portal than acknowledging how much the existing IDR system has done to increase IDR's costs.

Related: Feds mandate employer plan registration in No Surprises Act dispute resolution rule

The regulations were written by the Centers for Medicare & Medicaid Services, with support from the U.S. Labor Department's Employee Benefits Security Administration and the Internal Revenue Service.

Carol Skenes, the chief of staff of Turquoise Health, a company that puts enormous files of hospital price data into web-based tools that ordinary people can use, said there are signs that the updated IDR system could make the dispute resolution process more fair.

"CMS does acknowledge a few payer-specific concerns," Skenes said.

One example, she said, is the list of items that a provider will have to put in the notice stating that it wants to engage in the 30-day open negotiation process.

Providers will have to state, for example, whether they participate in specific plans' provider networks and attest to the accuracy of those statements, and they will have to identify the type of plan they think patients had.

Those requirements "address payer feedback about receiving disputes against the wrong plan or for ineligible items," Skenes said.

Getting more information from providers about disputed claims and having a faster, better-structured open negotiation process could make the dispute resolution system work better, Skenes said.

Attorneys at Ogletree Deakins have also predicted that the new IDR rules could help employers.

The new open negotiation period rules should help plan administrators knock out disputes that are not eligible for the No Surprises Act IDR process, attorneys at the firm wrote in a recent analysis.

What it means: Some experts are hoping that, for employer plans, the light at the end of the No Surprises Act IDR dispute tunnel could be sunshine, not a train.

The No Surprises Act open negotiation period: The No Surprises Act is supposed to help shield people with commercial health coverage against some types of claim disputes between health care providers and coverage providers.

The No Surprises Act IDR process is available to insured patients who use air ambulance services; many insured patients who get care from out-of-network doctors while in in-network hospitals; and insured patients who get emergency care at out-of-network hospitals.

Employers' concerns: Health care providers argue that health plans have been underpaying them and drowning them in paperwork for years, and that the No Surprises Act IDR system gives them a stronger voice.

Insurers and administrators of employers' self-insured health plans see implementation of the No Surprises Act IDR process as a catastrophe that may be responsible for much of the recent surge in health care claim costs.

"The numbers speak for themselves," said Navin Nagiah, the chief executive officer of Daffodil Health, a service that uses artificial intelligence systems to help employers manage out-of-network claim processes.

Commercial health plans typically pay about 200% to 300% of what Medicare pays for care for in-network claims.

When No Surprises Act claim disputes go to IDR entities, the entities end up requiring the payers to pay settlements for disputes involving Medicare coverage or other types of coverage not eligible for the IDR process.

The IDR entities side in favor of the providers about 88% of the time, and many awards are for amounts about 400% of the Medicare payment level, Nagiah said.

Nagiah cited examples of IDR entities awarding settlements for absurd amounts, such as an entity that awarded a settlement of $333,000 for a claim that a plan thought should have had a value of $2,660.

Regulation implementation: Federal agencies have completed the steps necessary to implement the new IDR update regulations.

One force that could slow or block implementation is a lawsuit, Skenes said.

Regulators could also change the regulations or their approach to implementation based on commenter feedback, she said.

The impact: One question is whether some of the regulation provisions that, in theory, could help employers represent actual process changes.

One example is the effort by regulation drafters to speed up the open negotiation process by setting response deadlines and other deadlines.

Christine Cooper, the CEO of aequum, a patient advocacy firm, said IDR entities have already been asking the parties involved in claim disputes to send them information.

In the past, "the notice of the deadline was provided by email," Cooper said. "Now, the deadline is set forth in the final rule instead of depending on the IDR entity, [but] this is a standardization of what was already occurring."

The future: Nagiah said he hopes regulators will maintain strong No Surprises Act protection for the patients.

The act "was passed to protect patients, and that core needs to stay," Nagiah said.

But Nagiah said an IDR entity should have to find that case meets tough standards before it award awards a settlement for more than 200% of what Medicare would pay for a service.

IDR entities should impose penalties when providers repeatedly send the IDR system disputes that are not subject to the No Surprises Act.

When providers fabricate the data in dispute packages or intentionally pretend that claims not subject to the No Surprises Act are eligible for the IDR process, "stiff penalties should be applied," Nagiah said.

Next steps for employers: Shay Forbes, the general manager for employer services at Turquoise, suggested that employers with self-insured plans work with benefits advisors to take these steps to prepare for the IDR system changes.

Turquoise is hoping employers will use its data to determine what the typical out-of-network payment rates for services really are, Forbes said.

Forbes said employers and their advisors should also:

1. Confirm that a plan's third-party administrator is preparing to meet the new requirements for plans.

2. Review service contracts to see who is responsible for handling IDR disputes and IDR dispute reporting.

3. Ask the TPA for detailed IDR activity reports that include data on items such as IDR dispute volume, IDR dispute outcomes and the effect of IDR disputes on out-of-network claim spending.