Surprise Billing Disputes Far Outpace Federal Projection

The federal government received 13 times more surprise billing disputes in the first half of 2023 than it initially estimated to receive over the course of a full calendar year, according to new CMS data.

The No Surprises Act (NSA), passed in 2021, established a Federal Independent Dispute Resolution (IDR) process that out-of-network providers and insurers can use to determine the OON rate for qualified IDR items or services after an unsuccessful open negotiation period. That process replaces the pre-NSA status quo of an OON provider sending a surprise bill to a patient. Of the 288,810 disputes filed through the Federal IDR portal over the first six months of 2023, about 46% were closed, with providers winning 77% of payment determinations.

During IDR, providers submit unresolved bills to an HHS-approved arbitrator, who then selects an amount submitted by either the payer or the provider using criteria laid out by HHS. The arbitrators are obliged to consider the qualifying payment amount (QPA) — based largely on median regional in-network rates for a service in a given area — in their decisions. According to CMS data, the prevailing offer was higher than the QPA in approximately 82% of payment determinations. The median prevailing offer often comes from the providers, facilities, or air ambulance service providers.

In addition, the number of disputes initiated has grown each quarter. In the second quarter of 2023, over 152,000 disputes were filed, a 12% increase compared to the first quarter.

In the first quarter of 2023, Tennessee saw the largest number of surprise billing disputes initiated through the Federal IDR portal, reporting almost 28,000 disputes, according to CMS data. Texas, Florida and Georgia all filed more than 10,000 disputes. In the second quarter, Texas topped the list with over 32,000 disputes initiated, followed by Florida (20,255).

The majority of surprise billing disputes were initiated by a small number of providers or their representatives. The top three initiating parties in the first half of 2023 — SCP Health, Team Health and Radiology Partners — represent thousands of clinicians across multiple states and accounted for 58% of all disputes. As the largest insurer by enrollment, UnitedHealthcare was involved most frequently in the disputes and listed as the non-initiating party in 103,551 disputes.

© 2024 MMIT
Jinghong Chen

Jinghong Chen Reporter

Jinghong has been producing infographics and data stories on employer-sponsored insurance, public health insurance programs and prescription drug coverage for AIS Health’s Health Plan Weekly and Radar on Drug Benefits since 2018. She also manages AIS Health’s annual executive compensation database for top insurers and Blue Cross and Blue Shield affiliates. Before joining AIS Health, she interned at WBEZ, Al Jazeera English and The New York Times Chinese. She graduated from Missouri School of Journalism with a focus on data journalism and international reporting.

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