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 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 1 provide. 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 information (PUFs) on instances resolved by way of the IDR course of. These information make clear dispute outcomes and the prevailing social gathering 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 giant awards. This text builds on our earlier evaluation to debate IDR entities’ position within the IDR course of and outcomes. Whereas IDR entities aren’t recognized within the PUFs, we developed a technique to establish 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 embrace 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 any 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 range 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 way of 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 social gathering’s price. The entity retains the non-prevailing social gathering 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 social gathering doesn’t pay, the opposite social gathering prevails by default.
The IDR entity arbitrates the dispute and should contemplate the qualifying fee quantity (QPA), amongst different components designated within the regulation, and any further non-prohibited data 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 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 important skew raises questions of whether or not the patterns range throughout the IDR entities.
Methodology
Since IDR entities aren’t 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 quite than definitive evaluation. We aimed to attract affordable 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 discipline 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 establish the person IDR entity. Isolating evaluation to single instances does restrict the scope of study: 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 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 establish 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 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 occasions to willpower better 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 based mostly on the yr they have 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 p.c of single-determination instances 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 in consequence. 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 Assorted Extensively In How Typically They Dominated In Favor Of Suppliers
4 IDR entities favored suppliers in additional than 90 p.c 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 p.c. Conversely, the bottom share throughout years and IDR entities was 19 p.c, 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-Willpower 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.
Notice: Every IDR entity was assigned a number one 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 contains information from single determinations and doesn’t embrace batched determinations.
Case Quantity Assorted Throughout Entities And Is Correlated To Outcomes
Quantity additionally various throughout IDR entities (Exhibit 2). For resolved single-determination instances estimated to be initiated in 2022, three IDR entities arbitrated almost 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 p.c of instances 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 Instances by IDR Entity, 2022 – Q2 2024
Supply: Writer’s evaluation of Federal IDR PUFs, Reporting 12 months 2022, 2023, and Q1-Q2 2024.
Notice: Every IDR entity was assigned a number one 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 contains information from single-determination instances and doesn’t embrace batched determinations.
The share of instances seems correlated with willpower outcomes: the IDR entities that rule in favor of suppliers are inclined to have greater case volumes. For instance, the highest IDR entity for resolved instances initiated in Q1-Q2 of 2024 determined greater than 90 p.c of instances 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 specific IDR entities, probably knowledgeable by inner information on choice developments. This veto technique may clarify how the IDR entities that the majority typically dominated in opposition to suppliers dominated on so few instances. General decision-making patterns ought to ideally be comparable throughout all IDR entities, so it is going to be necessary to know why variations exist.
Lags In Days To Willpower Have Declined; Common Instances Assorted 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 various 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 median (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 Willpower of Recognized Single-Willpower Instances by IDR Entity, 2022 – Q2 2024
Supply: Writer’s evaluation of Federal IDR PUFs, Reporting 12 months 2022, 2023, and Q1-Q2 2024.
Notice: Every IDR entity was assigned a number one 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 contains information from single determinations and doesn’t embrace batched determinations.
Variability Throughout IDR Entities Underscores A Want For Higher Transparency
Our evaluation signifies that IDR entities range considerably of their decision-making practices regardless of expectations that selections could be constant throughout entities. Our stakeholder discussions recommend that events could strategically veto specific IDR entities. Our evaluation sheds some mild on variations already recognized to supplier and payer stakeholders participating 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 data to CMS on every willpower, such because the quantities of each events’ gives and the ultimate willpower quantity, they aren’t required by statute to reveal the rationale for his or her selections (although the statute does permit the Secretary to require further reporting). In our stakeholder discussions, either side stated that IDR entities’ experiences on their willpower selections embrace minimal justification or rationale, restricted to obscure 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 concerning the credibility of submitted data, inconsistent sharing of case supplies, and lack of transparency on how historic funds or rationales submitted by the events temporary could affect selections. Higher transparency, both by way of legislative mandates or regulatory steerage, may handle these considerations.
The tempo of IDR entity choice making may additionally warrant better 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. Provided 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 are pending on the federal businesses ought to assist handle delays in eligibility determinations, however wouldn’t resolve incentives for IDR entities to find out eligibility.
As the amount of instances coming 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 scale back a number 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 doable.
Kennah Watts and Jack Hoadley “No Surprises Act Arbitrators Differ 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.
