By Kennah Watts and Jack Hoadley
The No Surprises Act (NSA) bans suppliers and amenities from sending customers steadiness payments for sure providers and thus protects customers from shock out-of-network (OON) payments in sure situations. When an OON supplier and a payer can not agree on a fee quantity, the events could enter into the impartial dispute decision (IDR) course of. When this occurs, each events submit a fee quantity and rationale, then a third-party arbitrator (IDR entity) selects and binds each events to at least one supply. The IDR entities are required to “decide an applicable fee quantity” and have come to play an instrumental position in OON funds.
The Facilities for Medicare and Medicaid Providers (CMS) recurrently launch public use recordsdata (PUFs) on instances resolved by way of the IDR course of. These recordsdata make clear dispute outcomes and the prevailing get together fee quantities. The PUFs permit researchers to look at developments in IDR use and to evaluate the effectiveness of NSA implementation. Earlier evaluation has proven unexpectedly excessive use of the IDR course of, principally by a small set of private-equity-backed supplier organizations, with suppliers profitable the overwhelming majority of instances and profitable massive awards. This text builds on our earlier evaluation to debate IDR entities’ position within the IDR course of and outcomes. Whereas IDR entities will not be recognized within the PUFs, we developed a technique to determine the IDR entities, and we report right here on their dispute volumes, determinations in favor of suppliers, and days to willpower. As related, we additionally embody observations from semi-structured conversations with stakeholders concerned within the IDR course of.
Background
After dispute initiation, the events should choose an IDR entity inside three enterprise days. Each events have the chance to recommend or veto IDR entities. If there isn’t a settlement, the Departments randomly choose an IDR entity. In 2022, CMS licensed 13 organizations to function IDR entities. As established within the NSA and described by CMS, to be licensed, entities should reveal experience in arbitration and claims administration; managed care; billing and coding; and well being care regulation. Whereas some entities fluctuate in providers supplied, and most existed previous to the NSA, some work solely in IDR arbitration.
There are two charges assessed to the events on a declare: an IDR entity price and an administrative price. The executive price is $115 per dispute (initially set by CMS steering at $50 however then raised in 2024 by way of a ultimate rule). Every IDR entity should choose an IDR entity price quantity inside CMS’s present predetermined higher and decrease fee vary: from $200 to $840 for single claims and $268 to $1,173 for batched determinations. These charges can and have modified, as proven within the 2023 and 2022 lists of IDR entity’s charges for single and batched disputes.
Each events should pay the IDR entity price up entrance. If the IDR entity determines the case is eligible and reaches a decision, the entity should refund the prevailing get together’s price. The entity retains the non-prevailing get together price as compensation, and IDR entities are solely paid for eligible instances. Each events should pay the non-refundable administrative price, remitted to the Departments. If both get together doesn’t pay, the opposite get together prevails by default.
The IDR entity arbitrates the dispute and should think about the qualifying fee quantity (QPA), amongst different elements designated within the regulation, and any extra non-prohibited info submitted by each events. Given the intent of the bipartisan congressional NSA sponsors to have OON billing disputes adjudicated pretty and impartially, one may count on determinations to be evenly break up between payers and suppliers, however information from 18 months of disputes signifies in any other case. In 2023, suppliers prevailed in 81 % of disputes, and within the first half of 2024, suppliers gained 85 %. This vital skew raises questions of whether or not the patterns fluctuate throughout the IDR entities.
Methodology
Since IDR entities will not be recognized within the PUF, we used two variables to fairly infer which entity decided which dispute: “IDR Entity Compensation” and “Size of Time to Make Dedication.” This system depends on a number of assumptions; as such, the outcomes needs to be thought of estimates relatively than definitive evaluation. We aimed to attract cheap patterns throughout entities and disputes to reveal broad developments in determinations.
The variable “IDR Entity Compensation” is outlined because the “greenback quantity representing the compensation for the licensed IDR entity for the dispute.” This area thus corresponds with the publicly listed fastened and batched fee quantities for every IDR entity. We restricted our evaluation to single willpower disputes to pair the listed fastened price quantity with the compensation and determine the person IDR entity. Isolating evaluation to single instances does restrict the scope of study: single disputes account for roughly 60 % of resolved disputes. All outcomes and displays exclude the opposite 40 % of disputes that had been a part of batched instances.
Moreover, whereas this technique is correct, it’s incomplete, as a number of IDR entities could have the identical fastened price, so we can not determine them individually. In these situations, we didn’t assign the case to an entity as we couldn’t precisely distinguish the entities. For instance, each Federal Hearings and Appeals Providers and MCMC Providers, LLC have a 2024 single willpower fastened price of $395, so we couldn’t correlate the reported compensation of $395 to a selected entity.
We used the “Size of Time to Make Dedication” variable to deduce the yr when the case was initiated and thus when the IDR entity price was paid. For instance, for disputes from Q1 of 2024 with occasions to willpower higher than 410 days, we estimate the dispute was initiated in 2022. We carried out this calculation to pair all disputes with the corresponding IDR entity fastened price quantity for that yr. We show the resolved instances primarily based on the yr they had been initiated (12,007 complete instances for 2022; 227,706 for 2023; 137,450 for 2024).
With these variables and utilized methodologies, we recognized IDR entities for 89 % of single-determination instances initiated in 2022, 60 % in 2023, and 42 % in 2024. On condition that these limitations additionally hinder volume-based evaluation, it’s troublesome to evaluate how the evaluation could also be skewed consequently. As related, we pair our quantitative findings with observations from semi-structured conversations with a number of prime plans, suppliers, and third-party intermediaries concerned within the IDR course of.
IDR Entities Different Broadly In How Usually They Dominated In Favor Of Suppliers
4 IDR entities favored suppliers in additional than 90 % of instances resolved within the first half of 2024, whereas one IDR entity favored suppliers in solely one-third of instances. For one IDR entity in a single yr, the share of disputes dominated in favor of suppliers was as excessive as 99 %. Conversely, the bottom share throughout years and IDR entities was 19 %, an 80 percentage-point distinction. The total distribution of determinations by IDR entity are proven in Exhibit 1 under.
Exhibit 1. Share of Recognized Single-Dedication Disputes Determined in Favor of Suppliers by IDR Entity, 2022 – Q2 2024
Supply: Writer’s evaluation of Federal IDR PUFs, Reporting 12 months 2022, 2023, and Q1-Q2 2024.
Observe: Every IDR entity was assigned a no 1 to 13, as proven on the x-axis. Lacking information for sure years signifies when the IDR entity didn’t have a novel fee quantity and thus couldn’t be individually recognized. Graph solely consists of information from single determinations and doesn’t embody batched determinations.
Case Quantity Different Throughout Entities And Is Correlated To Outcomes
Quantity additionally different throughout IDR entities (Exhibit 2). For resolved single-determination instances estimated to be initiated in 2022, three IDR entities arbitrated practically three-fourths of all disputes. The share of disputes is extra evenly distributed among the many IDR entities that could possibly be recognized within the first quarter of 2024, with six IDR entities every deciding 3 to five % of instances initiated in that quarter and the 2 highest quantity IDR entities deciding 7 % and 9 % of analyzed disputes.
Exhibit 2. Share of Recognized Single-Dedication Instances by IDR Entity, 2022 – Q2 2024
Supply: Writer’s evaluation of Federal IDR PUFs, Reporting 12 months 2022, 2023, and Q1-Q2 2024.
Observe: Every IDR entity was assigned a no 1 to 13, as proven on the x-axis. Lacking information for sure years signifies when the IDR entity didn’t have a novel fee quantity and thus couldn’t be individually recognized. Graph solely consists of information from single-determination instances and doesn’t embody batched determinations.
The share of instances seems correlated with willpower outcomes: the IDR entities that rule in favor of suppliers are inclined to have larger case volumes. For instance, the highest IDR entity for resolved instances initiated in Q1-Q2 of 2024 determined greater than 90 % of instances in favor of suppliers. The bottom quantity IDR entity had lower than 1 % of all disputes and decided solely one-third in favor of suppliers. In our discussions with stakeholders, we heard that plans and suppliers could purposefully choose or veto explicit IDR entities, probably knowledgeable by inner information on choice developments. This veto technique might clarify how the IDR entities that almost all typically dominated towards suppliers dominated on so few instances. General decision-making patterns ought to ideally be comparable throughout all IDR entities, so it will likely be vital to grasp why variations exist.
Lags In Days To Dedication Have Declined; Common Instances Different By Entity
Variations are additionally obvious in IDR entities’ time to willpower (Exhibit 3). In 2022, IDR entities determined single-determination instances inside 131 days on common. Days to willpower different throughout the highest-volume IDR entities from 79 to 195 days. In 2024, whereas the general common dropped to 54 days, the highest-volume IDR entities averaged 51 and 80 days. Just one IDR entity had a mean (31 days) near the statutory time to willpower of 30 days. Quantity doesn’t seem correlated to time to willpower, nor does it seem correlated to the IDR entities’ arbitration outcomes.
Exhibit 3. Common Days to Dedication of Recognized Single-Dedication Instances by IDR Entity, 2022 – Q2 2024
Supply: Writer’s evaluation of Federal IDR PUFs, Reporting 12 months 2022, 2023, and Q1-Q2 2024.
Observe: Every IDR entity was assigned a no 1 to 13, as proven on the x-axis. Lacking information for sure years signifies when the IDR entity didn’t have a novel fee quantity and thus couldn’t be individually recognized. Graph solely consists of information from single determinations and doesn’t embody batched determinations.
Variability Throughout IDR Entities Underscores A Want For Larger Transparency
Our evaluation signifies that IDR entities fluctuate considerably of their decision-making practices regardless of expectations that choices can be constant throughout entities. Our stakeholder discussions recommend that events could strategically veto explicit IDR entities. Our evaluation sheds some gentle on variations already identified to supplier and payer stakeholders partaking in IDR. Extra transparency within the PUFs would enhance our understanding of the IDR course of.
Equally, the rationale behind fee determinations stays unclear as a consequence of restricted transparency into how IDR entities consider submissions. Whereas IDR entities should disclose sure info to CMS on every willpower, such because the quantities of each events’ presents and the ultimate willpower quantity, they don’t seem to be required by statute to reveal the rationale for his or her choices (although the statute does permit the Secretary to require extra reporting). In our stakeholder discussions, each side mentioned that IDR entities’ studies on their willpower choices embody minimal justification or rationale, restricted to imprecise checkmarks and boilerplate language. With out public reporting, a standardized rubric, or an auditing mechanism, observers can solely speculate on the premise for fee determinations. Stakeholders raised considerations in regards to the credibility of submitted info, inconsistent sharing of case supplies, and lack of transparency on how historic funds or rationales submitted by the events transient could affect choices. Larger transparency, both by way of legislative mandates or regulatory steering, might tackle these considerations.
The tempo of IDR entity choice making can also warrant higher oversight by CMS. As our analyses present, the speed of filed instances continues to speed up quickly. The quantity of ineligible instances continues to be excessive as properly, elevating considerations that ineligible instances are contributing to system inefficiency. On condition that IDR entities decide case eligibility and are solely paid for eligible instances, some stakeholders recommend that IDR entities are incentivized to find out ineligible instances as eligible. The IDR system wants a simpler technique of screening out ineligible claims, however IDR entities will not be ideally positioned for this activity. Proposed guidelines which can be pending on the federal companies ought to assist tackle delays in eligibility determinations, however wouldn’t resolve incentives for IDR entities to find out eligibility.
As the amount of instances getting into the IDR course of continues to climb, IDR entities’ processes and determinations will proceed to be examined and scrutinized. Higher training, coaching, and oversight of IDR entities and their decision-making may assist cut back a few of the uncertainties within the present course of and increase confidence for each the contesting events and the broader group within the affect on prices and premiums that the quantities paid are as honest as potential.
Kennah Watts and Jack Hoadley “No Surprises Act Arbitrators Range Considerably In Their Resolution Making Patterns” June 24, 2025, https://www-healthaffairs-org.proxy.library.georgetown.edu/content material/forefront/no-surprises-act-arbitrators-vary-significantly-their-decision-making-patterns. Copyright © 2025 Well being Affairs by Challenge HOPE – The Individuals-to-Individuals Well being Basis, Inc.
