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Protecting Patients from Surprise Medical Bills


Published Sep 18, 2023 • by AHIP

Surprise medical bills should be a thing of the past. That’s why it was so important that Congress passed the No Surprises Act, to protect millions of Americans who face these bills weeks or months after they return home from the doctor or hospital. The law prohibits out-of-network health care providers from charging patients more than their in-network cost-sharing rate when a patient receives emergency services, air ambulance transportation, or is treated at an in-network hospital.

These protections took effect beginning January 1, 2022, and were followed by the establishment of the Federal Independent Dispute Resolution — or IDR — process that was created to settle payment disputes when health care providers seek additional payment from a health insurance provider. Since the process went into effect, it’s been overwhelmed with disputes and subject to rules that change frequently due to repeat lawsuits from a provider group in Texas, with little transparency into how payment disputes are being resolved, how IDR entities operate, and what payment determinations indicate about cost impacts.

The overuse of IDR likely means consumer cost savings are not being achieved, and health insurance providers are speaking out. To understand the IDR process and find opportunities to improve how the No Surprises Act is working, AHIP collected data from select member health insurance providers that have been responding parties in the IDR process.*

While the data show a lot of pain points and opportunities for improvement with the IDR process, it’s important to note that the vast majority of No Surprises Act-eligible disputes never proceed to IDR. Nine-in-10 payment dispute claims between health care providers and health insurance providers were resolved without the IDR process — 88% of initial payment offers were accepted by providers without entering an open negotiation period.

Presently, there is a glaring lack of uniformity, consistency, or transparency from IDR entities, which makes the process unpredictable, difficult to navigate, and costly. We know from official CMS data that the federal IDR process is favoring higher payments to providers, with 71% of payment determinations being in favor of initiating parties. AHIP’s responding plans reported disputes in favor of providers were growing over the past year as rules were re-written to favor health care providers.

The disputes are also costly and take too long to resolve. Two large health insurance providers reported spending, on average, more than $3 million on staff hired specifically to process IDR disputes. These costs are in addition to the costs for project management, negotiators, reporting, finance, and additional support positions needed to complete all steps required during the IDR process. And on average, IDR entities took 62 days to issue determinations, 32 days longer than required by law. Health insurance providers pointed to the high volume of cases, and especially high volume of ineligible submissions, as primary causes of delays in the process. They also reported that written explanations from IDR entities were missing, generic, or vague, which meant it is nearly impossible to determine how to approach similar disputes in the future, especially in a way that could avoid IDR altogether.

Many improvements are needed to the Federal IDR portal that could allow parties to track progress of a dispute and communicate with each other and the IDR entity. Additionally, the process has no appeal mechanism to challenge case eligibility once it has been decided or a way to address obvious errors — for example, if a case is submitted to IDR with wrong codes, there is currently no process to fix it quickly. These correctable errors lead to cases that clog up the system and cause additional delays.

Addressing these challenges is only the first step to reducing the use of IDR, growing provider networks, and lowering health care costs. The No Surprises Act has provided relief from the fear, stress, and frustration that comes with surprise medical bills, but behind the scenes, it needs to work better. Health insurance providers will continue to work with administration, Congress, and other health care stakeholders to better protect patients against surprise medical bills — and lower health care costs.

* In July 2023, AHIP collected data and feedback on the IDR process from health insurance providers nationwide to assess their experience with the Federal IDR process from the beginning of the process until March 2023. Respondents included a mix of large national and medium-sized regional plans. AHIP received responses from nine (9) health insurance providers representing 120 million commercial enrollees, accounting for the majority of national commercial health plan enrollment.

Learn more about the No Surprises Act.