CMS instructs billing dispute arbitrators to resume processing all decisions

Updated on March 20, 2023

The Centers for Medicare & Medicaid Services on March 17 gave arbitrators the all-clear to resume determinations on out-of-network payment disputes alongside the release of its updated August 2022 final rules.

CMS had been forced to pause Independent Dispute Resolution (IDR) after a Feb. 6 court ruling from the U.S. District Court for the Eastern District of Texas ruled in favor of providers.

Plaintiffs in the case successfully argued that the guidance given to dispute arbitrators weighed too heavily on the qualified payment amount, which favors payers, and went against Congress' intent with the No Surprises Act. 

Following a partial resumption in late February, CMS said Friday that all certified IDR entities may now resume processing all payment determinations in line with its revised guidance. 

Additionally, CMS' announcement said that disputing parties will now begin receiving "a majority" of notices regarding payment determinations directly from the IDR portal and an automated CMS email account. 

Jeffrey Davis, director of regulatory and external affairs for the American College of Emergency Physicians (ACEP), said in a statement that the organization is pleased with revised guidance that "now more closely reflects the No Surprises Act Statute."

"This is a major step forward that reflects ACEP efforts to make the arbitration process more fair and balanced," he said in the emailed statement. "However, significant reform is still needed to make sure the IDR process is accessible to physicians, especially those in smaller independent practices. Hopefully, with the IDR process reopened, arbiters can start working through the significant backlog."

Updated on Feb. 27, 2023

Following the issue of a court-ordered pause to out-of-network payment dispute arbitration, the Centers for Medicare & Medicaid Services is now instructing arbitrators to resume determinations for care that occurred prior to Oct. 25, 2022. 

The notice, published Friday, tells Independent Dispute Resolution (IDR) entities to refer to instructions laid out in CMS' October 2021 interim final rules. That guidance has now been "revised" following early February's decision from the U.S. District Court for the Eastern District of Texas and a prior ruling from July 2022, CMS said. 

CMS had instructed arbitrators earlier this month to hold off on most decisions as the agency worked to interpret the court's ruling (see below the break). 

"Disputes involving items or services furnished before October 25, 2022, are not affected by the February 6, 2023 opinion and order in Texas Medical Association, et al. v. United States Department of Health and Human Services et al.," CMS wrote in the notice.

"Certified IDR entities will continue to hold issuance of payment determinations that involve items or services furnished on or after October 25, 2022 until the Departments issue further guidance. The Departments are working diligently to complete necessary guidance and system updates in order to allow certified IDR entities to resume processing payment determinations for these disputes," CMS wrote.

Feb. 13, 2023

The Centers for Medicare & Medicaid Services have instructed arbitrators for out-of-network payment disputes to pause and recall certain payment determinations due to a recent court decision striking down key parts of the agency’s surprise billing regulations.

CMS said in a Feb. 10 notice that its departments “are in the process of evaluating and updating” implementation of the Federal Independent Dispute Resolution process to be consistent with a Feb. 6 ruling from the U.S. District Court for the Eastern District of Texas.

The court agreed with the provider plaintiff, the Texas Medical Association, that CMS once again went against the congressional intent of 2020’s No Surprises Act.

The law banning surprise medical bills went into effect at the top of 2022, though CMS has now been forced to amend arbitration—its process for settling payment disputes between providers and payers—for a second time.

Specifically, rules released by CMS outlining how an independent third party should choose between the amounts proposed by each side were successfully contested in court by providers for too heavily weighing on the qualified payment amount, which favors payers.

“[CMS’ final rule released in Aug. 2022] continues to place a thumb on the scale for the QPA by requiring arbitrators to begin with the QPA and then imposing restrictions on the non-QPA factors that appear nowhere in the statute,” Judge Jeremy Kernodle wrote in last week’s decision.

The summary judgment granted by Kernodle vacated certain portions of the rule and remanded it back to CMS.

As a result, CMS instructed arbitrators on Friday to immediately stop issuing new payment determinations until further guidance is available. Further, arbitrators should recall any payment determinations that were issued after Feb. 6, the date of Kernodle’s decision, CMS wrote.

Other parts of the dispute resolution process remain fair game for arbitrators as they await additional direction from CMS, the agency wrote.

The court’s decision to send back arbitration guidelines for a second time was welcomed by the hospital industry. Melinda Hatton, general counsel for the American Hospital Association, said in a statement last week that her group hopes CMS will now “work with hospitals and health systems to implement the fair process Congress intended.”

The Texas Medical Association, meanwhile, has other issues with the administration’s implementation of the No Surprises Act, having recently filed another lawsuit challenging increases to the administrative fees charged when a provider or payer initiates an arbitration dispute.