Navigating NSA Nightmares
Navigating the No Surprises Act often feels like a perilous fight for insurers/payors. While it may be unfair to call the system rigged, the independent dispute resolution process appears to inherently favor the initiating party.
Based on the most recent data published by the Centers for Medicare & Medicaid Services, the initiating party, i.e. the provider, wins 84% of the time. While the determination process may be a binary baseball-style arbitration, pitting the Bad News Bears against the dynastic New York Yankees of the 1950s presents serious challenges. Whether it’s the perceived bias or a need to defend an ineligible claim, the ultimate question is how can insurers/payors put themselves in the best position to avoid defeat?
The No Surprises Act primarily seeks to eliminate balance bills in three circumstances:
- Emergency services from out-of-network providers
- Air ambulance services
- Nonemergency services at an in-network facility billed by an out-of-network provider.
Generally, patients can only be billed for in-network cost-sharing amounts with some limitations and exceptions. Nonetheless, providers and payors do regularly dispute the appropriate in-network rates for otherwise out-of-network providers, and it’s those disagreements that eventually find their way to the IDR process.
After a payor sends an initial payment or notice of denial of payment to the provider, either party may initiate the open negotiation period. However, from a practical matter, there’s little reason for the payor to dispute its own payment (or lack thereof), thus the provider is predominantly the initiating party and, based on the above statistics, the odds-on favorite to prevail should the negotiation stall and reach an eventual determination. Nonetheless, the two parties do have a 30-business day period to negotiate a payment amount, and it’s particularly beneficial to the insurer/payor to do so because good faith efforts may be a determining factor in an arbitrator’s ruling.
Continuing with the theme, there’s a concept in baseball sabermetrics that predicts a professional team to win approximately 30% of its games by simply fielding a roster. While the initial data provided by CMS doesn’t even support that outcome for non-initiating parties, a contributing factor is unresponsiveness. In baseball, failure to take the field would result in a forfeit. The same applies to a non-initiating party failing to respond to a dispute. The 2024 data underscore a pertinent issue because more than 10% of disputes ostensibly end with a default decision in favor of the initiating party. Simply responding to the dispute is perhaps the single greatest area of opportunity to improve an insurer’s winning percentage. That by itself, however, doesn’t overcome the underlying bias or nightmare involving ineligible claims.
Understanding the intricacies of the No Surprises Act and the IDR process before crafting a response and understanding the basis for a determination are both key. Is the claim ineligible, either due to timeliness or the nature of the underlying service? Does the determination even align with the submitted offers? Recent determinations undermine what should otherwise be easy questions to answer. When asked, ClaimDOC’s dedicated NSA staff quickly identified two egregious examples.
Case 1
A provider submitted a claim totaling $47,454.49. After payment was received, the provider initiated open negotiations, but no agreement was reached, primarily because the offer more than quadrupled the qualifying payment amount.
- Total charge: $47,454.49
- ClaimDOC allowed: $1,982.68 (120% CCR)
- QPA: $7,653.23
- Provider offer in open negotiation: $32,218.18
- IDR determination: $112, 948.57– $65,494.08 more than the billed charge
A subsequent review determined the discrepancy was likely due to a clerical error involving service code 80053 being transposed as a line level amount pf $80,053. The IDR entity neither noticed nor failed to correct the error despite its role to determine the value of the services.
Case 2
A payment was made in December 2023 on a claim totaling $10,911. Unsatisfied with the payment amount, a provider subsequently submitted an open negotiation notice in July 2024, more than six months beyond the filing deadline.
- Total charge: $10,911
- ClaimDOC allowed: $566.73
- QPA: $1,091.35
- Provider offer in open negotiation: $7,637.70
- IDR determination: $3,000.63
Compliance with filing timelines is a requirement of the IDR process. The non-initiating party specifically objected to the timeliness of the claim, supported by clear documentation. Despite objection, a determination was made by the IDR entity in favor of the provider.
There are undoubtedly similar scenarios impacting all insurers/payors, and the solution isn’t particularly clear. Determinations are presumed to be final. The initial guidelines have been to contact the CMS Help Desk, but the legislation does not imply such a process serves as an appeal. There are examples of the Department of Labor getting involved to aid in post-determination disputes, but there’s no guidance for when or how the federal government is supposed to act. To further complicate matters, the act itself currently offers a questionable enforcement mechanism on final determinations. Those uncertainties are only heightened when the determination itself is blatantly wrong.
Regardless of whether a determination is justified, the takeaways are undeniable. Non-initiating parties should remain attentive and treat its dispute response as its day in court. Being well-reasoned (without referencing billed charges because, again, this process is provider-friendly), demonstrating good faith, and maintaining a paper trail are all vital components in building an argument centered around fairness. The nature of baseball-style arbitration may be out of control, but there are enough controllables along the way to step up to the plate and take a swing. However, for a chance to win, plan sponsors need a dedicated team of professionals who understand the game and work together to drive their point home.