Advocacy results in lower 2024 admin fee for IDR disputes

January 09, 2024

The U.S. departments of Health and Human Services, Labor and the Treasury recently released a final rule that increases the administrative fee for disputes initiated under the No Surprises Act, through which providers and payors can resolve payment disputes for certain out-of-network charges. As required by statute, both parties to a dispute must pay a non-refundable administrative fee for participating in the federal independent dispute resolution (IDR) process. Under the recently finalized rule, this fee will increase from $50 to $115.

The California Medical Association (CMA), Texas Medical Association (TMA) and others in organized medicine were successful in getting the amount lowered from the $350 fee initially planned, which would have been a 600% jump.

In August 2023, a federal court judge in Texas invalidated an attempt by the federal agencies to increase the IDR administrative fee by 600%. TMA had filed a lawsuit—the fourth filed by TMA challenging provisions of the rule—arguing that the steep jump in fees would dramatically curtail many physicians’ ability to seek independent dispute resolution when a health plan offers insufficient payment for out-of-network care. The judge ruled that the 600% fee increase was (i) issued without notice and comment period, and (ii) it was found to be arbitrary and capricious.

Following this ruling, the agencies in late September issued a proposed rule that would have increased the fee to $150, and opened it up for stakeholder comments. CMA—through the Physicians Advocacy Institute (PAI)—submitted comments on the proposed rule, expressing concern that the 300% fee increase would still make the IDR process cost-prohibitive for many physicians, which undermines Congress’s intent when passing the No Surprises Act.

“The adverse impact on access to the IDR process will be serious. Under the Proposed Rule, whenever the amount in controversy (i.e., the difference between the amount requested by the physician and the amount the insurer has offered) is $150 or less, the IDR process would be cost-prohibitive because the cost of submitting the claim would exceed the amount the physician would recover if they won,” PAI wrote in the comments. “The NSA’s text, structure, history, and purpose make clear that Congress intended the IDR process to be meaningfully available to ensure fair reimbursement of covered claims. However, the Proposed Rule drastically increases the barriers to entry and shuts out numerous providers with lower cost claims.”

The final rule sets the non-refundable IDR administrative fee at $115 for disputes initiated on or after January 22, 2024, the effective date of the rule. The final rule also finalizes a certified IDR entity fee range of $200-$840 for single determinations and $268-$1,173 for batched determinations. Additionally, for batched determinations exceeding 25 dispute line items, IDR entities may set a fixed fee within the range of $75-$250 for each increment of 25 dispute line items included in the batched dispute, beginning with the 26th line item. 

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