CMS proposes three-fold increase for surprise billing arbitration fees

The Centers for Medicare & Medicaid Services (CMS) has issued a proposed rule that would increase the administrative fee to enter into surprise billing arbitration from $50 to $150 per dispute. CMS also proposes increasing the range arbitrators are allowed to charge by 20% increase for single determinations and 25% for batched determinations. Unless changed during subsequent notice-and-comment rulemaking, the proposal would take effect for disputes initiated on or after Jan. 1, 2024, or the effective date of the final rule, whichever is later.

The arbitration process under the federal No Surprises Act (NSA) is officially called independent dispute resolution, or IDR, and fees for the process have been a focus of legal challenges. On December 23, 2022, CMS proposed raising the IDR fee from $50 to $350, a 600% increase. A federal judge in Texas struck that down in August, saying CMS violated notice and consent requirements that mandate government agencies first publish a notice of proposed rulemaking and give interested persons an opportunity to participate. But with parties filing far more disputes than the agency anticipated and a backlog burgeoning, CMS is proposing another fee increase, albeit more modest.

The Texas Medical Association (TMA) and other health care providers have filed four separate suits challenging different regulations CMS enacted to implement the NSA. The first three lawsuits argued the rules skewed payment amounts toward payers in ways that disadvantage physicians and other health care providers. The latest lawsuit spurred the proposed rule on administrative fees. Due to the suits, certain functions of the federal IDR process are temporarily paused, while some have restarted.

On Sept. 5, CMS directed arbitrators to resume making eligibility and conflict of interest determinations for all single and bundled disputes submitted on or before Aug. 3, 2023, and encouraged disputing parties to continue engaging in open negotiations.

Effective Sept. 21, CMS directed arbitrators to resume processing all single and bundled disputes already submitted to the IDR portal and assigned to a certified IDR entity. The ability to initiate new disputes involving air ambulance items or services as well as batched disputes for air ambulance and non-air ambulance items and services is currently unavailable. IDR portal functionalities related to previously initiated batched disputes are also unavailable. Disputing parties should continue to engage in open negotiation according to the required timeframes.

For more information, see this CMS FAQ page. 

— Brennan Cantrell, AAFP Commercial Health Insurance Strategist

Posted on Sept. 27, 2023