Independent Dispute Resolution Detailed in New Surprise Billing Rule

The Biden-Harris Administration has released a long-awaited interim final rule that will explains how payers and providers will agree on an out-of-network rate when surprise billing occurs. The rule also includes requirements for healthcare cost estimates for self-pay patients and adds protections in the review process so that people with employer-sponsored or individual health plans can dispute denied payment for certain claims.

“No one should have to go bankrupt over a surprise medical bill,” HHS Secretary Xavier Becerra said in an announcement today. HHS crafted the rule along with the Department of Labor, Department of the Treasury, and the Office of Personnel Management (OPM).

 “With today’s rule, we continue to deliver on President Biden’s Competition Executive Order by promoting price transparency and exposing inflated health care costs. Our goal is simple: giving Americans a better deal from a more competitive health care system,” Becerra continued.

The interim final rule aims to achieve those goals by implementing an independent dispute resolution (IDR) process through which payers and providers can submit payment rates for out-of-network services that resulted in a surprise medical bill.

According to the rule, disputing parties must initiate a 30-day “open negotiation” period to determine an appropriate rate even before engaging with the IDR process. If the open negotiation fails to produce an agreed upon rate, then payers and providers will jointly select a certified IDR entity—a list of which will be shared later, the announcement stated.

Parties can then submit their proposed rates for the out-of-network services and the IDR entity will issue a binding determination based on the proposed rates and supporting documentation. Determinations will also take into account the quality payment amount, which is typically the payer’s median contracted rate for the same or similar service in an area.

Both parties will also have to pay an administrative fee, set at $50 each for 2022.

The interim final rule is the third in a series from the federal departments implementing the No Surprises Act, a law passed in December 2020 that will prohibit most surprise billing cases. Previous interim final rules detailed surprise billing requirements for air ambulance providers and consumer protections against surprise billing.

All three of the rules will be in effect on Jan. 1, 2022.