The No Surprises Act (NSA), which took effect in January 2022, was enacted to protect patients from balance billing and large, unexpected medical bills (surprise bills). These protections apply to emergency care, certain nonemergency services provided by out-of-network providers at in-network facilities, and air ambulance services. The NSA prevents these out-of-network providers from billing patients directly for these services. Instead, the patient’s benefit is treated as in-network, and the provider and health plan negotiate reimbursement with one another. To resolve payment disputes, the NSA established an independent dispute resolution (IDR) process. If a health plan and provider cannot agree on an acceptable payment amount, either party may submit the dispute to a certified IDR entity (IDRE). At the conclusion of the IDR process, the IDRE must select either the provider’s or health plan’s offer as the binding reimbursement amount. The non-prevailing party must also pay the IDRE fee.
Literature about the NSA often references the high case volume and high proportion of provider wins. Milliman reviewed the data to help payers, providers, and other stakeholders better understand the potential financial and operational implications of the federal IDR process. We analyzed publicly available Centers for Medicare and Medicaid Services (CMS) dispute data to evaluate emerging trends in dispute volume, prevailing offer outcomes, administrative fees, and the distribution of financial impacts across the parties involved. We present a data-driven view of how the process is functioning in practice.
The paper covers the following key points.
- IDR dispute outcomes: CMS data showing how surprise providers have won the majority of disputes
- Industry impacts: IDRE revenues approaching $1 billion per year, paid mostly by health plans, on course to surpass more than $2 billion in 2026
- Dispute eligibility: IDREs incentivized to consider as many eligible disputes as reasonably possible
- Regulatory update: Recent changes to federal IDR operations final rule that aim to make the IDR process more efficient