HHS suspends the Federal IDR process

Member Alert: August 7, 2023

HHS suspends the Federal IDR process
Suspension includes initiation of new disputes until the departments can provide additional instructions. 

For a third time, a Texas federal judge has sided with the Texas Medical Association in its series of legal challenges over the No Surprises Act. The most recent court victory has resulted in the 5th Circuit in Texas vacating: (1) the $350 fee to begin an arbitration; and (2) the batching provisions from a September 2021 rule. 

Background:

•  The first case relates to the sudden, seven-fold increase from $50 to $350 in the administrative fee that out-of-network physicians were required to pay for initiating payment disputes through the IDR process with insurance companies regarding fair payment to physicians who had cared for patients covered by those payers. Of note, the ruling was not a complete victory for the TMA, as the judge said providers are not entitled to a refund of fees that they have paid this year.
• The second was a rule that severely limited the ability of these physicians to combine similar disputes in a single arbitration proceeding — thereby substantially increasing administrative costs and decreasing efficiency in dispute resolution. TMA argued that the batching provisions were unlawful because they are narrower than the statute, which allowed for the batching of claims for all procedures in a patient’s treatment plan, episode of care, or even across patients with similar conditions, but the administration instead chose to restrict batching to claims with the same service code. 
• In each instance, the Court found that the government’s actions were taken without giving the public notice and an opportunity to comment as required by federal law — and that those adversely affected by these actions had strong arguments against those actions.

As a result, HHS has temporarily suspended the IDR process. Notably, this isn’t the first time there has been a halt on the IDR process — the agencies also froze some portal operations for five weeks in February and March after the TMA prevailed in litigation involving the criteria used to decide IDR cases. This time is different in that all activity has been halted, whereas in the earlier instance stakeholders could still send disputes to the system. 
 
It’s unclear for how long the portal will be closed, but it will likely require new guidance from the agency. Earlier this year, the agencies indicated that they have been working on a new proposed rule in which these issues could be addressed. AAMS  will be following the publication of those regulations closely, as well as any announcements related to the portal.