On June 4, the Departments of Health and Human Services, Labor, and Treasury (Departments) issued a final rule related to certain provisions of the No Surprises Act (NSA) regarding the Federal Independent Dispute Resolution (IDR) process, which was originally established under the Consolidated Appropriations Act, 2021. This rule finalizes new requirements relating to the disclosure of information that group health plans and health insurance issuers offering group or individual health insurance coverage must include along with the initial payment or notice of payment denial for items and services subject to the surprise billing protections.
The final rule became effective this month and includes several key provisions:
IDR Registry
Payers subject to the Federal IDR process must register with the Federal IDR Registry within 90 business days after the date the registry becomes available or the date the payer begins offering coverage subject to the Federal IDR process.
Claim Submission and Processing
Plans must communicate information by using claim adjustment reason codes (CARCs) and remittance advice remark codes (RARCs) when providing any paper or electronic remittance advice (ERA) to an out-of-network provider (those providers who do not have a direct or indirect contractual relationship with the plan).
The Departments published guidance on the use of the CARC and RARC codes on July 17 and will require plans to include these codes on remittances for items and services furnished on or after January 1, 2027.
Open Negotiation Period
Prior to initiating the Federal IDR process, the parties must first exhaust the open negotiation period. The initiating entity (either payer or provider) must provide a written open negotiation notice to the other party and to the Departments through the Federal IDR portal to initiate the 30-day open negotiation period. The notice must include these compliance requirements:
- Information sufficient to identify the provider, facility, or provider of air ambulance services and the applicable National Provider Identifier (NPI)
- Information sufficient to identify the plan or issuer, including the plan or issuer’s registration number or an attestation notice that the plan or issuer’s registration number was not provided on any remittance advice
- Information sufficient to identify the item or service, including these:
- the date(s) the item or service was furnished and, if the party submitting the open negotiation notice is a provider, facility, or provider of air ambulance services, the date(s) that the provider, facility, or provider of air ambulance services received the initial payment or notice of denial of payment for the item or service from the plan or issuer;
- the type of item or service (specifically, whether the item or service is an emergency service, a non-emergency service, or an air ambulance service);
- whether the service is a professional service or facility-based service;
- the state where the item or service was furnished;
- the claim number;
- the service code;
- information to identify the location where the item or service was furnished (such as place of service code or bill type code)
- The initial payment amount (including $0 if payment is denied)
- The qualifying payment amount (QPA), if provided or if the party submitting the open negotiation notice is a plan or issuer
- An offer of an out-of-network rate for each item or service
- If the party submitting the open negotiation notice is a plan or issuer, the amount of cost sharing imposed for the item or service, if any
- If the party submitting the open negotiation notice is a provider or facility, a statement that the items and services do not qualify for the notice and consent exception
- A statement that the provider, facility, or provider of air ambulance services was a nonparticipating provider, nonparticipating emergency facility, or nonparticipating provider of air ambulance services on the date the item or service was furnished
- A copy of any remittance advice associated with the initial payment or notice of denial of payment for the item or service
The responding party must send an open negotiation response by the 15th business day of the 30-business-day open negotiation period.
Administrative Fee
The Departments are finalizing an administrative fee of $15 per party per dispute, which is significantly lower than the proposed administrative fee of $150 per party per dispute.
Batching
The final rule allows disputes to be batched by a single CPT code, DRG code, or HCPCS code and modifies the line-item limit from 25 as proposed to 50. The requirements for batching include
- The items and services were furnished during a single patient encounter, defined as a patient encounter on one or more consecutive days during which the qualified IDR items or services were furnished to the same patient and billed on the same claim form.
- Batched items and services must be billed by the same provider, facility, or provider of air ambulance services.
- Items and services are considered to relate to the treatment of a similar condition if they are furnished to one or more patients and are billed under the same or comparable service code.
- Batched items and services must be paid for by the same plan or issuer.
- Qualified IDR items and services must have been furnished within the same 30-business-day period following the date on which the first item or service included in the batched dispute was furnished.
The IDR process final rule gives healthcare providers more transparency and standardized information from insurers, making it easier to identify, file, and resolve payment disputes under the No Surprises Act. PYA’s Managed Care and Reimbursement team helps healthcare providers understand new federal regulations and navigate their implications, including reimbursement for services under NSA.
