Photo: PeopleImages/Getty Images
A new report released jointly by AHIP and the Blue Cross Blue Shield Association estimates that up to 39% of out-of-network claims submitted to the federal independent dispute resolution (IDR) process were ineligible, with insurers accusing providers of inundating the process to score higher payments.
In 2024, nearly 20 million healthcare claims met the criteria for federal surprise billing protections, meaning nearly 20 million surprise bills were prevented in 2024, data showed. However, the costs of operating the arbitration program continue to rise sharply.
Three out of four (76%) claims were paid without further dispute when providers accepted the plan’s initial payment.
Yet many disputes should never have been submitted to the federal IDR process as they were ineligible under the law, according to insurers. Health plans identified 39% of all disputes as ineligible, including 45% of non-emergency service disputes, the report said.
Some of the common defects included claims for services payable under Medicare or Medicaid; disputes that were already resolved through IDR and then resubmitted; disputes involving in-network providers; and claims subject to state surprise billing laws.
Authors also suggest that IDR entities (IDREs) are failing to identify a large volume of ineligible disputes submitted by providers. Because of this, IDREs are considering and issuing payment determinations on ineligible disputes.
WHAT’S THE IMPACT
The IDR process was established by the No Surprises Act. Under the NSA, qualified items or services that are eligible for IDR include out-of-network emergency services, out-of-network non-emergency services provided at an in-network facility and out-of-network air ambulance services.
There are also procedural requirements for a qualified item or service to be eligible for payment determination as part of the federal IDR process, including timing requirements, first participation in an open negotiation process, a cooling-off period, rules for batching or bundling multiple claims as a dispute, and a lack of applicable state surprise billing law.
Despite the challenges, once arbitration decisions are issued, plans pay nearly three-quarters of arbitration awards within 30 days, according to the report; 41% were paid in just 15 days. When delays occurred for qualified IDR items or services, they were most often due to provider submission errors (such as wrong contact information or missing details), or processing challenges stemming from the very high volume of IDR cases, the report found.
AHIP and BCBSA said the IDR process itself is costly, diverting funds plans could otherwise have spent on patient care or used to lower premiums and patient cost-sharing.
Adding to that cost, insurers allege, is that IDR is being overused by some providers who submit high volumes of disputes, many of which are ineligible, the report said.
THE LARGER TREND
The No Surprises Enforcement Act – new legislation that was introduced in July – would fine health insurance companies that fail to pay physicians within 30 days after losing the IDR process.
The legislation does not impact the patient protections included in the NSA, nor does it raise out-of-pocket costs for patients, lawmakers said.
Jeff Lagasse is editor of Healthcare Finance News.
Email: jlagasse@himss.org
Healthcare Finance News is a HIMSS Media publication.