HHS and Treasury Jointly Publish Supplemental Update on Federal IDR Process

On February 15, 2024, the Departments of Labor, Health and Human Services (“HHS”), and the Treasury (collectively, the “Departments”) jointly published a supplemental update (“Supplemental Update”) on the federal independent dispute resolution (“IDR”) process. Supplemental Background on Federal Independent Dispute Resolution Public Use Files (“Supplemental Update”) 2-3 (Feb. 15, 2024). This Supplemental Update is the first time the Departments have released the full scope of statutorily-required information from the first two calendar quarters of 2023. As part of ongoing efforts to streamline and improve the full federal IDR process, the Departments continued to make technical and operational enhancements to the process to facilitate throughput. As such, in addition to the statutorily required information, the Departments confirmed that future reports will include the number of payment disputes initiated, the number closed, and the reasons for closure. The Departments noted that, ultimately, these additions were intended to promote transparency in the federal IDR process and be responsive to the Departments’ responsibilities to the public. In furtherance of their efforts to improve the efficiency of certified IDR entities, the Supplemental Update also noted that, in addition to these new reported elements, the Departments have proposed new rules that make changes to portal policies and operations. See Federal Independent Dispute Resolution Operations, 88 Fed. Reg. 75744 (November 3, 2023). Briefly, the new proposed rules are intended to also promote efficiency by removing barriers that reduce the efficiency of certified IDR entities (e.g., common communication issues) and limit their ability to render timely payment determinations.

In this latest Supplemental Update, the Departments published statistical data for all payment determinations made between January 1, 2023 and June 30, 2023. The data showed that the number of disputes initiated through the federal IDR portal continues to grow each quarter, with a 12% increase in disputes initiated between the first and second quarter of 2023, and a 24% increase between the last quarter of 2022 and first quarter of 2023, despite the large volume of disputes and the complexity of eligibility determinations. As a result, certified IDR entities have had to scale up operations and, in the first half of 2023, issued five times the number of payment determinations made in all of 2022. Even so, the Departments recognized that there are disputing parties that continue to await eligibility and payment determinations. As such, the Departments reiterated that one of their primary objectives is “to help certified IDR entities and disputing parties obtain resolution on disputes as expeditiously as possible.” Supplemental Update at 2.

The Departments noted that certified IDR entities are required to expend a considerable amount of time and resources in making eligibility determinations, which is the primary cause of delay in processing disputes. Of note, eligibility determinations are processed faster when certified IDR entities have the right information at their fingertips. As such, any gaps in information identified by the Departments have now been added to the dispute initiation form as additional required data elements, in efforts to expedite eligibility review. The Departments attributed the lower number of ineligible disputes to these process improvements and greater familiarity among disputing parties of eligibility requirements. Notably, although currently inconclusive, the data provided in the update may prove useful in assessing whether the August 2022 final rules are, as the Departments seem to be suggesting, effective at making the federal IDR process more efficient in making final payment determinations.

Resumption of Federal IDR Claims Processing

As of December 15, 2023, the Departments of the Treasury, Labor, and HHS (“Departments”) fully reopened the federal independent dispute resolution (“IDR”) portal for the processing of all previously initiated batched disputes, new batched disputes, and new single disputes involving air ambulance services. With this change, the federal IDR Portal is now fully reopened for processing all payment disputes regarding out-of-network rates for certain items and services.¹ When the temporary suspension began on August 25, 2023, the Departments made the decision to pause all portal operations while they conducted a comprehensive review of all federal IDR portal operations in response to Texas Medical Association, et al. v. United States Department of Health and Human Services, Case No. 6:22-cv-450-JDK, 2023 WL 5489028 (E.D. Tex. Aug. 24, 2023) (“TMA III”), to ensure that all portal operations (and the federal IDR process in general) fully complied with the newly vacated portions of the July 2021 Interim Final Rules (86 Fed. Reg. 36,872 (2021)).

In anticipation of the full portal reopening, on November 30, 2023, the Departments hosted a public webinar to discuss portal changes coming out of TMA III and their relevant guidance published in the latest set of Frequently Asked Questions regarding the federal IDR process.² This webinar focused on procedural changes related to the processing of batched disputes and air ambulance services, which, at the time, remained temporarily suspended on the portal. This update included the following clarifications:

• Batched dispute eligibility determinations made prior to August 3, 2023 are not affected by the portal shut down. The Departments made clear that certified IDR entities are not required to reevaluate any eligibility determinations completed prior to August 3, 2023. While certified IDR entities were prohibited from amending or adding to their existing determinations, the Departments clarified that they may continue with resolving any ongoing disputes that were eligible and were appropriately batched. Any inappropriately batched dispute must be resubmitted (if appropriate under the updated timeline extensions – see below chart for more detail).
• Batched disputes initiated prior to August 3, 2023 but not formally deemed eligible must be reevaluated to ensure consistency with the latest guidance. Ongoing disputes where the certified IDR entity has not made any formal eligibility determination regarding batching of certain items and services must be reassessed against the latest batching eligibility standards before progressing as a batched dispute. If the certified IDR entity determines that relevant items and services were improperly batched under the new standards, the initiating party has one opportunity to resubmit the batched dispute request. If the resubmission is also deemed improper, there will be no further opportunity for resubmission as a batched dispute.
• Newly initiated batched disputes will be evaluated under standards consistent with the latest guidance. All newly initiated batched dispute requests will be evaluated against the latest standards for eligibility as a batched dispute.

As noted by the Departments on the webinar, a certified IDR entity has sole authority to evaluate and determine whether certain items and services are properly batched. While many stakeholders requested specific guidance or examples to clarify when “batching” of items or services would be consistent with correct batching practices, presenters declined to provide specific details, and affirmed that such responsibility was solely reserved for the certified IDR entity.

Latest Timelines Now in Effect

As of December 21, 2023, the following timelines apply:

Dispute Status	Date of Initiation	Normal Timeframe (resumed on January 16, 2023)
Batched disputes and single disputes involving air ambulance services.	Deadline for IDR initiation fell between August 3, 2023 and December 14, 2023.	Initiations must be submitted within 60-business-day period, beginning on December 15, 2023 and ending on March 14, 2024.
Batched disputes and single disputes involving air ambulance services.	Deadline for IDR initiation fell between December 15, 2023 and March 13, 2024.	Initiations must be submitted within 60-business-day period, beginning on December 15, 2023 and ending on March 14, 2024.
Batched disputes and single disputes involving air ambulance services.	Deadline for IDR initiation falls on or after March 13, 2024.	Standard four business days after the end of the Open Negotiation Period, or if the dispute is subject to the 90-calendar-day suspension period following a payment determination, the usual 30-business-day period, to initiate a batched or air ambulance dispute in the federal IDR portal.
Batched disputes and single disputes involving air ambulance services.	Engaged in certified IDR entity selection for batched disputes when the federal IDR portal temporarily closed.	Deadline for parties to jointly select a certified IDR entity was December 29, 2023.
Batched disputes and single disputes involving air ambulance services.	Initiated under extensions of deadlines after the federal IDR portal reopens (see above).	Deadline for the parties to jointly select a certified IDR entity will be 10 business days after initiation.
Batched disputes and single disputes involving air ambulance services.	Certified IDR entity provided notice prior to August 3, 2023 that items and services in the dispute were improperly batched, but deadline for reconsideration was between August 3, 2023 and August 9, 2023.	Initiating parties have one opportunity to resubmit the inappropriate batched items and services for reconsideration within 10 business days of being notified by the certified IDR entity.3 Generally, resubmissions must be submitted within four business days of the certified IDR entity’s notification. Once the deadline has passed, the initiation party will not be able to otherwise submit them to the federal IDR
All disputes.	Submission of fees and offers.	Ten business days after certified IDR entity selection.
All disputes.	Request for additional time to respond to certified IDR entity’s request for additional information.	Certified IDR entity’s have been instructed to grant such requests through January 16, 2024.
All disputes.	Request for additional 10 business days after original offer deadline to submit an offer.	Certified IDR entity’s have been instructed to grant such requests through January 16, 2024.

Please stay tuned for more regulatory updates as the Ropes & Gray team continues to monitor the latest changes and developments with respect to consumer protections and the impact of surprise billing.