By Kennah Watts and Jack Hoadley
The No Surprises Act (NSA) bans suppliers and services from sending shoppers steadiness payments for sure companies and thus protects shoppers from shock out-of-network (OON) payments in sure eventualities. 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 provide. The IDR entities are required to “decide an applicable fee quantity” and have come to play an instrumental function in OON funds.
The Facilities for Medicare and Medicaid Providers (CMS) commonly launch public use information (PUFs) on circumstances resolved by the IDR course of. These information make clear dispute outcomes and the prevailing celebration fee quantities. The PUFs enable researchers to look at tendencies in IDR use and to evaluate the effectiveness of NSA implementation. Earlier evaluation has proven unexpectedly excessive use of the IDR course of, largely by a small set of private-equity-backed supplier organizations, with suppliers profitable the overwhelming majority of circumstances and profitable giant awards. This text builds on our earlier evaluation to debate IDR entities’ function within the IDR course of and outcomes. Whereas IDR entities should not 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 dedication. 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 is no such thing as 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 exhibit experience in arbitration and claims administration; managed care; billing and coding; and well being care legislation. Whereas some entities differ in companies provided, 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 steerage at $50 however then raised in 2024 by a last 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 celebration’s price. The entity retains the non-prevailing celebration price as compensation, and IDR entities are solely paid for eligible circumstances. Each events should pay the non-refundable administrative price, remitted to the Departments. If both celebration doesn’t pay, the opposite celebration prevails by default.
The IDR entity arbitrates the dispute and should think about the qualifying fee quantity (QPA), amongst different elements designated within the legislation, and any further 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 would possibly count on determinations to be evenly cut up between payers and suppliers, however information from 18 months of disputes signifies in any other case. In 2023, suppliers prevailed in 81 p.c of disputes, and within the first half of 2024, suppliers received 85 p.c. This vital skew raises questions of whether or not the patterns differ throughout the IDR entities.
Methodology
Since IDR entities should not recognized within the PUF, we used two variables to moderately infer which entity decided which dispute: “IDR Entity Compensation” and “Size of Time to Make Willpower.” This technique depends on a number of assumptions; as such, the outcomes must be thought of estimates moderately than definitive evaluation. We aimed to attract affordable patterns throughout entities and disputes to exhibit broad tendencies 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 discipline thus corresponds with the publicly listed fastened and batched fee quantities for every IDR entity. We restricted our evaluation to single dedication disputes to pair the listed fastened price quantity with the compensation and determine the person IDR entity. Isolating evaluation to single circumstances does restrict the scope of research: single disputes account for about 60 p.c of resolved disputes. All outcomes and displays exclude the opposite 40 p.c of disputes that have been a part of batched circumstances.
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 cases, 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 dedication fastened price of $395, so we couldn’t correlate the reported compensation of $395 to a particular entity.
We used the “Size of Time to Make Willpower” 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 instances to dedication better than 410 days, we estimate the dispute was initiated in 2022. We performed this calculation to pair all disputes with the corresponding IDR entity fastened price quantity for that yr. We show the resolved circumstances based mostly on the yr they have been initiated (12,007 whole circumstances for 2022; 227,706 for 2023; 137,450 for 2024).
With these variables and utilized methodologies, we recognized IDR entities for 89 p.c of single-determination circumstances initiated in 2022, 60 p.c in 2023, and 42 p.c in 2024. Provided 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 high 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 p.c of circumstances resolved within the first half of 2024, whereas one IDR entity favored suppliers in solely one-third of circumstances. For one IDR entity in a single yr, the share of disputes dominated in favor of suppliers was as excessive as 99 p.c. Conversely, the bottom share throughout years and IDR entities was 19 p.c, an 80 percentage-point distinction. The complete distribution of determinations by IDR entity are proven in Exhibit 1 under.
Exhibit 1. Share of Recognized Single-Willpower Disputes Determined in Favor of Suppliers by IDR Entity, 2022 – Q2 2024
Supply: Creator’s evaluation of Federal IDR PUFs, Reporting 12 months 2022, 2023, and Q1-Q2 2024.
Word: Every IDR entity was assigned a #1 to 13, as proven on the x-axis. Lacking information for sure years signifies when the IDR entity didn’t have a singular 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 diversified throughout IDR entities (Exhibit 2). For resolved single-determination circumstances 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 may very well be recognized within the first quarter of 2024, with six IDR entities every deciding 3 to five p.c of circumstances initiated in that quarter and the 2 highest quantity IDR entities deciding 7 p.c and 9 p.c of analyzed disputes.
Exhibit 2. Share of Recognized Single-Willpower Circumstances by IDR Entity, 2022 – Q2 2024
Supply: Creator’s evaluation of Federal IDR PUFs, Reporting 12 months 2022, 2023, and Q1-Q2 2024.
Word: Every IDR entity was assigned a #1 to 13, as proven on the x-axis. Lacking information for sure years signifies when the IDR entity didn’t have a singular fee quantity and thus couldn’t be individually recognized. Graph solely consists of information from single-determination circumstances and doesn’t embody batched determinations.
The share of circumstances seems correlated with dedication outcomes: the IDR entities that rule in favor of suppliers are inclined to have increased case volumes. For instance, the highest IDR entity for resolved circumstances initiated in Q1-Q2 of 2024 determined greater than 90 p.c of circumstances in favor of suppliers. The bottom quantity IDR entity had lower than 1 p.c 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 resolution tendencies. This veto technique may clarify how the IDR entities that the majority usually dominated towards suppliers dominated on so few circumstances. Total decision-making patterns ought to ideally be related throughout all IDR entities, so it is going to be essential to grasp why variations exist.
Lags In Days To Willpower Have Declined; Common Occasions Different By Entity
Variations are additionally obvious in IDR entities’ time to dedication (Exhibit 3). In 2022, IDR entities determined single-determination circumstances inside 131 days on common. Days to dedication diversified 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 dedication of 30 days. Quantity doesn’t seem correlated to time to dedication, nor does it seem correlated to the IDR entities’ arbitration outcomes.
Exhibit 3. Common Days to Willpower of Recognized Single-Willpower Circumstances by IDR Entity, 2022 – Q2 2024
Supply: Creator’s evaluation of Federal IDR PUFs, Reporting 12 months 2022, 2023, and Q1-Q2 2024.
Word: Every IDR entity was assigned a #1 to 13, as proven on the x-axis. Lacking information for sure years signifies when the IDR entity didn’t have a singular 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 Better Transparency
Our evaluation signifies that IDR entities differ 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 attributable to restricted transparency into how IDR entities consider submissions. Whereas IDR entities should disclose sure info to CMS on every dedication, such because the quantities of each events’ presents and the ultimate dedication quantity, they aren’t required by statute to reveal the rationale for his or her choices (although the statute does enable the Secretary to require further reporting). In our stakeholder discussions, each side stated that IDR entities’ reviews on their dedication 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 idea 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 temporary could affect choices. Better transparency, both by legislative mandates or regulatory steerage, may deal with these considerations.
The tempo of IDR entity resolution making may warrant better oversight by CMS. As our analyses present, the speed of filed circumstances continues to speed up quickly. The quantity of ineligible circumstances continues to be excessive as properly, elevating considerations that ineligible circumstances are contributing to system inefficiency. Provided that IDR entities decide case eligibility and are solely paid for eligible circumstances, some stakeholders recommend that IDR entities are incentivized to find out ineligible circumstances 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 businesses ought to assist deal with delays in eligibility determinations, however wouldn’t resolve incentives for IDR entities to find out eligibility.
As the quantity of circumstances coming into the IDR course of continues to climb, IDR entities’ processes and determinations will proceed to be examined and scrutinized. Higher schooling, coaching, and oversight of IDR entities and their decision-making would possibly assist cut back among 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 truthful as potential.
Kennah Watts and Jack Hoadley “No Surprises Act Arbitrators Fluctuate Considerably In Their Choice 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 Mission HOPE – The Individuals-to-Individuals Well being Basis, Inc.
