The IDR has 100 problems

Update: on February 10, CMS and HHS issued a statement instructing IDR entities to halt payment determinations "until receiving further guidance from the Departments."

Last month, an illustrious member of the Turquoise Authors Gild wondered if we were witnessing the start of the IDRmageddon. Shortly thereafter, that same illustrious member started going by Nostradamus on weekends and holidays because, as it turns out, that appears to be the case.

If you’re just now tuning in, the Independent Dispute Resolution (IDR) process was defined with The No Surprises Act as a way for providers and payers to agree on fair payments for out-of-network services rendered. The process has gone over like a lead balloon thus far, and this week, a judge in Texas ruled that more changes to the process need to be made. The Texas Medical Association has filed four lawsuits against the IDR since its inception, and a focal point in their arguments is whether or not the Qualifying Payment Amount (QPA) calculation is inherently favorable to payers, and as a result, is hurting providers seeking fair reimbursement for out-of-network services.

So what’s next for everyone’s favorite embattled resolution process? HHS must now revamp the payment amount review process that the judge deemed unjust because it, “...continues to place a thumb on the scale for the [qualified payment amount] by requiring arbitrators to begin with the [qualified payment amount] and then imposing restrictions on the non-[qualified payment amount] factors that appear nowhere in the statute.” In layman's terms: legally, the payer’s QPA offers were like serving french fries and calling them vegetables on a technicality.

This ruling also makes the disputes currently stuck in the IDR quagmire even…more quagmire-y. CMS reported there are more than 67,000 disputes currently in the queue that don’t seem to have much chance of getting toward resolution quickly. Or even at medium speed. And lest we forget, the cherry on top of the IDR sundae is that the non-refundable price to even enter the IDR jumped a whopping 600% as of January 1st, 2023.

So now that we’re here, what’s there to do while the IDR gets sorted? We’re quadrupling down on the idea that the best way to minimize the negative effects of a broken process is to avoid that process entirely. Capitalize on the 30-day negotiation period, or, even better, use price transparency to your advantage and source QPA calculations from reputable publicly-available data, such as Rate Sense. That data is foundational to payment calculation for all parties involved and provides a neutral, reliable source of payment information from which HHS could build a better process.

IDRmaggedon may be in full swing, but the silver lining is that it forces HHS and the industry to make much-needed improvements on fair payment for out-of-network services. Payers and providers must be aligned on reimbursement to continue minimizing time spent on administrative hold ups and focusing on cost-effective patient care.

Even if you don’t have a claim ready and waiting for the IDR, you can go through the motions of defining a QPA. Sign-up for Rate Sense (don’t worry, it’s free) and see how it feels to source calculations for yourself.