Biden admin proposes overhauls to lambasted out-of-network billing dispute resolution process

The Biden administration has proposed a new rule refining several aspects of the healthcare services billing process in response to criticisms levied from all sides of the industry.

Unveiled Friday afternoon, the proposed rule (PDF) brings new requirements for payers, providers and the third-party arbitrators who settle out-of-network billing disputes under the No Surprises Act’s independent dispute resolution (IDR) process.

If finalized, the administration said its changes would improve communication between the parties, create efficiencies, speed up payment determinations and make the process more accessible.

“The Biden-Harris Administration continues to take actions to protect patients from junk health insurance and unfair billing practices. This rule is the next step in ensuring we take patients out of the middle of billing disputes between insurers and healthcare providers,” Department of Health and Human Services (HHS) Secretary Xavier Becerra said in his department’s announcement. “Eliminating surprise medical bills, reducing the burden of medical debt and curtailing junk insurance plans continue to be high priorities.”

To date, federal agencies’ rollout of the No Surprises Act has been assailed by grievances and interruptions.

Providers have brought lawsuits against the administration’s guidance on how determinations should be made and how disputes should be initiated, several of which led to court-ordered pauses and rewrites. The process was recently resumed in full after the third and fourth such successful challenges.

Payers, meanwhile, have highlighted a “small subset of providers” that abuse the dispute process. Three individual companies are responsible for more than half of all emergency or nonemergency services disputes, the insurance lobby recently testified.  

Congress is similarly displeased with the bumpy road its out-of-network billing legislation has faced. Architects of the law have critiqued federal agencies for undermining “one of the greatest consumer protection reforms in our country’s history” and ignoring congressional intent. They’ve also grilled Becerra and other officials on huge backlogs of IDR cases and lengthy delays in judgments.

Reduced fees, batching, open negotiation notices and more

Friday’s proposed rule—released jointly by HHS, the Department of Labor, the Department of the Treasury and the Office of Personnel Management—aims to address the criticisms with a slew of new processes and requirements.

Per an HHS fact sheet, the administration is proposing that payers include additional information alongside their initial payments or notices of denials, such as the qualifying payment amount and contact information for initiating the open negotiation period.

This, along with other standardized information, “would facilitate communication between parties prior to and during open negotiation and reduce the number of ineligible payment disputes submitted to the Federal IDR process,” HHS said.

To encourage parties to more meaningfully engage in the 30-day open negotiation period, the administration said it will be requiring parties to provide a formal open negotiation notice to the other entity and HHS through the Federal IDR portal. The other party would also be required to respond to the notice before the fifteenth day of the open negotiation period.

“These proposed changes would create more certainty regarding whether and when an open negotiation period occurred by ensuring that start and end dates are documented in the Federal IDR portal,” HHS said.

To further cut down on dispute volume, the proposed rule would establish an eligibility review process the government can invoke “when dispute volume is high” to help clear the queue.

As for the IDR process’s contentious administrative fees, the administration said it will be setting a reduced fee "when the highest offer made during open negotiation by either disputing party was less than a predetermined threshold." These fees—which will be collected directly by the departments rather than IDR entities—will also be reduced for the non-initiating party if a dispute is eventually determined to be ineligible for arbitration.

Other updates proposed by the departments would permit certain related payment determinations to be “batched” into a single dispute for efficiency, broaden the “extenuating circumstances” that qualify for an extended timeline and IDR registry requirements for payers.

“The No Surprises Act continues to protect consumers from surprise medical bills,” Centers for Medicare & Medicaid Services Administrator Chiquita Brooks-LaSure said in a release. “The Biden-Harris Administration continues to demonstrate a commitment to implementing the law for the American people. Today’s proposed rule will strengthen the communication between healthcare payers and providers and improve upon the independent dispute resolution process.”