Independent Dispute Ruckus

CMS released an Initial Report on the Independent Dispute Resolution (IDR) Process that consolidated statistics for April - September 2022. It seems charitable to say the IDR had the opposite of a glow-up in 2022 because the results aren’t pretty. Several articles that go over the high-level stats have been published, nearly all of which seem to confirm the IDR process is not yet trending in the right direction.

Nearly half (46%) of disputes were challenged as ineligible by the non-initiating party, and 80% of those challenges came back in favor of the non-initiating party. Within that 80%, the determination was often because the services were rendered in a state with a state-level dispute resolution process that takes precedence over the federal IDR. Other disputes were deemed ineligible due to incorrect batching attempts when completing the initial IDR intake process.

This points to a knowledge gap regarding what payments or services are eligible for the IDR process. It’s also possible that initiating parties may be taking the “throw it up against the wall to see what sticks” approach and disputing as many out-of-network underpayments as possible as a way of getting to know the new process. Recall that the IDR and QPA all stemmed from an effort to ensure emergent services are paid in-network rates. The IDR is available when the QPA amount paid is less than the amount the provider or facility was expecting. Despite the original intent, the current backlog is full of disputes that may or may not be correctly in the IDR queue.

Overall, the initial report points to the reality that it’s been an arduous and opaque journey through the IDR process thus far. On top of that, the Texas Medical Association has filed multiple lawsuits against the QPA calculation, and CMS is continually tweaking the IDR intake process as more disputes get initiated.

Is there anything immediate that can be done for entities looking to ensure fair payments and minimize the time in the resolution queue? But of course! Is this a Turquoise blog or is this a Turquoise blog?

Independent Dispute Rates

Once we factor in the additional time spent waiting for a final determination over the fair payment amount after a dispute has been reviewed and deemed eligible, the road to correct payment looks longer and longer.

The quickest way for providers and facilities providing out-of-network care to see payment for their services is to avoid the IDR altogether. Still, IDR avoidance is only an option when payers and providers agree on the Qualifying Payment Amount (QPA) for services rendered. Which, as everyone knows, definitely happens all the time with no pushback from either party. This is a prime time opportunity for publicly-available price transparency repositories to step in and offer a neutral view of fair payment rates…which sounds a lot like sending the Turquoise Health bat signal into the sky.

Into Gotham, we go!

One noteworthy section of the report included a list of the most frequently-disputed CPT codes, and a lot of those codes were for emergency services. When payers receive claims that qualify for QPA payments, the No Surprises Act allows third-party databases to act as QPA calculators in certain scenarios.

Access to provider and payer rate data is key to ensuring fair and timely rate calculation. For example, we used our own Clear Rates Data to take a virtual trip to the Lone Star State to review three of these heavily-disputed CPTs (99283 - 99285). We pulled a single-payer product offering (think an individual PPO or HMO rate, not a blended rate) and plotted each rate as well as the median rates, as shown below.

Texas Institutional Emergency Billing Code Rate Distributions

These median rates are useful because the QPA is defined as, “The median contracted rate factors in contracted rates of all plans offered by the issuer in the same insurance market for the same or similar items or services provided in the same or similar specialty or facility of the same or similar facility type in the geographic region where the item or service is furnished.” That’s a very wordy way of saying exactly what the plot above shows: similar rates for similar services by the same payer.

So how does this scatterplot tie back to the clogged drain that is the IDR dispute queue? Did we lose the Batman throughline? Armed with the knowledge that fair market value prices are available through neutral third parties, there are a few questions CMS could answer that would further guide entities on how entities can settle on QPA payments and avoid the IDR process:

  • What are payers using to calculate their initial QPAs?
  • What sort of exchanges are occurring between providers and payers in the 30-day open negotiation window before an IDR window opens?
  • Most simply, what is there to fuss about when median fair prices are publicly available?

Thus far, it seems most of the IDR hold-ups have been administrative in nature, which is overshadowing a more impactful, more scalable, more accessible, and quicker solution: reliable rate data all parties can see upfront takes questions away from QPA calculation, thus removing the bottleneck to getting paid. Fair QPA calculation leads to fewer IDR disputes. The IDR process has proven it’s not scalable, timely, or favorable to initiating parties. We believe the path forward should be two-pronged. One prong is focused on a significantly cleaner IDR process, and the other is focused on the 30-day negotiations window where both parties are held accountable by fair rate data. It’s easier to trust independent transparency data currently available, which we believe is underutilized in current QPA scenarios.

Independent Dispute Refrain

On top of the report CMS issued, on December 23rd, CMS also announced that effective Jan 1, 2023, the non-refundable cost of participating in an IDR dispute jumped from $50 to up to $350 per party.

You know the old saying: “How do we stop the people from doing something we asked them to do? Make it less inviting!”

Any way you look, it’s hard to find an attractive angle on the IDR. While the process remains in a legal quagmire, we believe there are some immediate steps parties can take to stay as far away from the IDR as we’re currently staying from the vegetables we promised to eat as part of our new year's resolutions.

Here’s what parties can do:

  1. Educate themselves on state-specific dispute resolution processes. Based on the CMS report, this is especially key for entities providing services in Texas, Florida, Georgia, Tennessee, or South Carolina.
  2. Validate fair payment calculation using a database or neutral third party (Turquoise has entered the chat) when available to bolster confidence in any negotiations if the QPA does not equal the amount expected.
  3. Until an overhaul or additional work has been done, the IDR should be seen as a last resort. If there are no other options, knowledge of state-specific processes and the IDR intake batching process is key. CMS released a Job Aid as a step-by-step guide and Turquoise created a checklist to run through prior to entering the dispute initiation portal.

Given the current IDR backlog and confusion over QPA calculation, we believe the clear path forward is paved with reliable, public price transparency data. That data is foundational to payment calculation for all parties involved and relieves some of the pressure on a cumbersome dispute resolution process. When payers and providers are aligned on using the same data source to calculate payments, the need for dispute resolution begins to fall away, and the focus shifts back to cost-effective patient care.

Want to share your experiences in the IDR or opine on data as the source of truth? Looking to request your very own Turquoise bat phone? We’re listening, so reach out!