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Guidance Released for IDR Entities

Julie Kozminski
January 4, 2022

On Dec. 29, 2021, the Centers for Medicare & Medicaid Services released guidance for certified independent dispute resolution (IDR) entities.

Under part II of the No Surprises Act interim final rule, providers and payers may enter the IDR process when they fail to agree on a payment rate for out-of-network services during an open negotiation period. The guidance provides an overview of the IDR process and IDR entities’ responsibilities as part of the process.

The guidance reviews the timeline for open negotiations and initiating the federal IDR process. Of note, if an open negotiation notice is not properly provided by the initiating party, a subsequent payment determination from the IDR entity might be unenforceable.

Selection of the IDR Entity

According to the guidance, the initiating party will identify its preferred IDR entity within 3 business days following initiation of the IDR process. The other party may agree or object to the IDR entity selection; in the event the other party objects, they must provide an explanation and propose an alternative IDR entity. Once an IDR entity is agreed on, both parties must attest that the selected IDR entity does not have a conflict of interest. The IDR entity also must attest it does not have any conflicts of interest. If the parties fail to agree on an IDR entity, one will be selected for them.

Further, if the non-initiating party believes the federal IDR process does not apply, they must submit an explanation through the IDR portal, which will be passed to the selected IDR entity. The IDR entity will then decide if the federal IDR process applies.

Payment Determination

The guidance details when and how to apply the qualifying payment amount (QPA) and the consideration of additional information. The guidance notes it is not the role of the IDR entity to determine whether the QPA has been calculated correctly by the plan; make determinations of medical necessity; or review denials of coverage. The IDR entity must begin with the presumption the QPA is the appropriate out-of-network rate and select the offer closest to the QPA, unless credible information is submitted that clearly demonstrates the QPA is materially different from the appropriate rate.

For batched or bundled items and services, the IDR entity may select different offers from either or both parties when the QPAs for the items and services are different.

When considering additional information, the IDR entity must:

  • consider only credible information;
  • consider only information submitted in connection to an offer; and
  • not consider information on prohibited factors.

Additional Information for Consideration for Payment Determination

If the three general rules for consideration are met, additional circumstances and factors that can be considered include:

  • level of training, experience, and quality and outcome measurements of the provider/facility that furnished the service. Credible information must clearly demonstrate the experience level or training of a provider was necessary for providing the service to the patient, or that their experience or training made an impact on the care provided, and that this information was not considered in the calculation of the QPA;
  • market share held by the provider/facility or the plan in the region in which the service was provided. Credible information must clearly demonstrate the QPA is materially different from the appropriate out-of-network rate. The QPA might be unreasonably high or low based on provider or plan market dominance;
  • teaching status, case mix, and scope of services of the facility that provided the service. Credible information must demonstrate these data points were in some way critical to the delivery of the service and not adequately accounted for in the QPA;
  • demonstration of good faith efforts made by the provider or plan to enter into network agreements with each other and, if applicable, contracted rates between the provider and plan during the previous four years;
  • acuity of the patient receiving the service, or complexity of furnishing the service to the patient. However, service codes and modifiers reflecting patient acuity and complexity already will be reflected in the QPA, so this information should only be considered in rare instances such as:
    • outliers for which the intensity of care exceeds what is typical for the code;
    • the QPA is considered too high for services that have become less complex over time; and
    • the parties disagree on what service code or modifier accurately describes the service.

Prohibited Factors

The IDR entity may not consider these factors:

  • usual and customary charges; and
  • payment or reimbursement rate for items and services furnished by the provider payable by a public payer, such as Medicare, Medicaid, the Children’s Health Insurance Program, and Tricare.

The IDR entity will have 30 business days from the date of selection to select one of the payment offers and notify the parties in writing of their payment determination. The notification must include the selected offer and explanation for the determination.

The guidance also reviews extension of time periods, recordkeeping and reporting requirements, fees, confidentiality requirements, and revocation of certification for an IDR entity.

Contact Director of Policy Rob Nelb, MPH, at rnelb@essentialhospitals.org or 202.585.0127 with questions.

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