Updated No Surprises Act Dispute Resolution Fees Announced

On December 18, 2023, the Departments of Health and Human Services, Labor, and Treasury (the Departments) released the No Surprises Act Independent Dispute Resolution (IDR) Fees Final Rule.  This rule finalizes increases to the two fees associated with the IDR process: the non-refundable administrative fee and the refundable certified IDR entity fee.  ASA supports the reduced administrative fee but opposes the increased IDR entity fee.
 
In this rule, CMS is finalizing an administrative fee of $115, a $65 increase over the current fee of $50.  This is lower than the proposed fee of $150.  Based on public comments, including those from ASA, the Departments are modifying the administrative fee methodology used to estimate the number of administrative fees paid. The Departments will use the estimated number of administrative fees paid to certified IDR entities, rather than the estimated number of closed disputes, to estimate the total number of administrative fees paid. In addition, the Departments will not assume a 25 percent reduction in the volume of disputes as the result of the District Court vacating certain batching requirements in TMA IV. The Departments are also revising the expenditures estimated to be made by the Departments in carrying out the Federal IDR process from approximately $70 million to approximately $56.6 million to reflect a reduction in the Departments’ anticipated assistance with eligibility determinations.  

Further, the effective date of the fee increase is 30 days from when this rule is formally posted in the Federal Register (likely 12/21) not January 1, 2024, as was proposed.  Thus, the lower fee will still be in effect throughout the time period in which the Departments have granted flexibilities to the process (including initiating new batched disputes). These flexibilities will end on January 16, 2024.  The new fees will likely be in effect by around January 20, 2024.  Once effective, the new fee would remain in effect until changed by subsequent rulemaking. 
 
With respect to the refundable (to the prevailing party) certified IDR entity fee, the Departments finalize higher fees set forth in the proposed rule.  The fee increase was strongly opposed by ASA and many other physician stakeholders. The increases are effective 30 days after the final rule is posted on the Federal Register, instead of January 1, 2024.  For disputes initiated on or after this date (again, around January 20, 2024), the Departments will allow certified IDR entities to charge a fixed certified IDR entity fee for single determinations within the range of $200 to $840. This fee range represents a 20 percent increase to the upper limit from the 2023 single determination fee range.  For batched claims, the Departments finalize its proposal to allow certified IDR entities to charge a fixed certified IDR entity fee within the range of $268 to $1,173. This fee range represents a 25 percent increase to the upper limit from the 2023 batched determination fee range.  This range will only apply to batches up to 25 claims (line items).  For batched disputes with more than 25 line items, the certified IDR entity fee will be able to increase the base amount for every additional 25 line items by a fixed value between $75 and $250, as determined by the certified IDR entity. For example, if a certified IDR entity had set its batched determination fee at $1,000 (which would be within the fee range of $268 to $1,173) and its tiered fee at $200 (which would be within the tiered fee range of $75 to $250) for each additional increment of 25 line items, and were to be selected for a batched determination with 53 line items (which corresponds to 2 increments of 25 line items within the tiered fee structure plus the batched determination fee) it would be permitted to charge $1,400 ($1,000 + ($200 x 2)) as its batched determination fee in calendar year 2024.

Overall, the new certified IDR entity fee represents a significant increase over the current fee structure. The current batching fee is $268–$938. In addition, they can charge additional fees on top of that based on the size of the batch: 

• 2-20 line items: 100% of the approved batched determination fee 
• 21-50 line items: 110% of the approved batched determination fee 
• 51-80 line items: 120% of the approved batched determination fee 
• 81 line items or more: 130% of the approved batched determination fee

There is now a cap on the fee once the batch exceeds 81 line items, but under the final policy, the cap is removed, and there is an equal additional fee for every 25 line items. 

The following table compares the maximum allowed charge at different sizes of batches:

Maximum Fees (current: $938, final: $1,173 with $250 increments for all cases above 25)
	Current	Final New Fee	Percent increase
20 cases	$938	$1,173	25.1%
50 cases	$1,032	$1,423	37.9%
80 cases	$1,126	$1,923	70.8%
150 cases	$1,219	$2,423	98.8%
200 cases	$1,219	$2,923	139.8%

As the table shows, large batches could result in more than double the amount of fees than disputing parties currently pay.

The Departments also establish in the final rule that certified IDR entity fee ranges may be set no more frequently than once per calendar year. This allows the certified IDR entity fee ranges to remain effective over multiple years until they are updated in notice and comment rulemaking, while addressing commenters’ concerns by preventing multiple adjustments of the certified IDR entity fee ranges in a single year.

It is important to note that the structure of these fees may only be in place for one year.  There are other changes are coming in 2024 based on the policies in the IDR operations proposed rule. That rule proposes a new process and timeline for paying the administrative fee and would cap the number of services that can be batched at 25 (which would impact the certified IDR entity fee amount).