Federal Independent Dispute Resolution (IDR) Process Administrative Fee and Certified IDR Entity Fee Ranges: Proposed Rule, 26 CFR Part 54; 29 CFR Part 2590; 45 CFR Part 149, 88 Fed. Reg. 65888 (Sept. 26, 2023)
In response to recent litigation, the DOL, HHS, and IRS have proposed amendments to the surprise medical billing regulations addressing the fees associated with the independent dispute resolution (IDR) process. As background, the agencies issued interim final regulations in 2021 to implement the procedural aspects of plan payments to nonparticipating providers subject to the surprise billing protections, including rules governing the cost of the federal IDR process. They also issued subregulatory guidance setting IDR fees, which was later amended to increase the fees for participating in the process. However, a federal trial court, agreeing with providers that the agencies had improperly bypassed the Administrative Procedure Act’s notice-and-comment requirement, vacated the guidance increasing fees as well as portions of the interim final regulations that set the criteria for “batching” multiple related claims for resolution in a single proceeding.
The proposed amendments provide that the administrative fee amount and the ranges for certified IDR entity fees for single and batched disputes would be set and adjusted in response to evolving conditions through notice-and-comment rulemaking, rather than in subregulatory guidance published annually. The proposed amendments also detail the methodology that would be used to calculate the administrative fee and the considerations to be used to develop the certified IDR entity fee ranges. Furthermore, the agencies propose that the administrative fee for disputes initiated on or after the later of the effective date of the regulations (once finalized) or January 1, 2024, would be $150 per party per dispute, and certified IDR entities would be permitted to charge a fixed certified IDR entity fee within the range of $200 to $840 for single determinations, or $268 to $1,173 for batched determinations. These proposed fees, which reflect the agencies’ attempt to “judiciously balance” the costs of accessing the IDR process with the IDR entities’ ability to cover their operating expenses, would remain in effect until changed by subsequent rulemaking based on the proposed methodology.
EBIA Comment: The agencies project that 225,000 disputes will be closed through IDR in 2024, with an agency cost for carrying out the process of approximately $70 million. They also foreshadow more IDR rules to come. For instance, the agencies advise that they intend to propose additional regulations related to the administrative fee, including rules that would change the manner and timeframe for paying the fee, reduce the fee amount for disputes that are determined ineligible or that involve low-dollar claims, and codify the consequences of failing to pay fees. In the meantime, the agencies are soliciting comments on all aspects of these proposed regulations (with comments due by October 26), and the HHS website reports (as of September 21) that the agencies have directed certified IDR entities to resume processing all single and bundled disputes submitted on or before August 3, 2023. For more information, see EBIA’s Health Care Reform manual at Section XII.B.3 (“Surprise Medical Billing: Emergency and Non-Emergency Services”) and EBIA’s Group Health Plan Mandates manual at Section XIII.B (“Patient Protections”). See also EBIA’s Self-Insured Health Plans manual at Section XIII.C (“Federally Mandated Benefits”).
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