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IDR: The Confusion Never Ends!

By: Jon Jablon, Esq.

It seems like every day that The Phia Group's consulting team is presented with an IDR-related issue brought up by either a provider in an appeal or simply a TPA trying to iron out or streamline its processes. Sometimes the question centers around the specifics of the IDR process, but sometimes the question instead focuses on the very concept of IDR itself and when it becomes applicable to begin with.

By definition, the IDR process, as prescribed by the No Surprises Act, is intended specifically and only to choose between two competing offers. For IDR to become applicable, the plan must have first tendered some initial payment (or at least adjudicated the claim as covered). To contrast, a complete denial of a given line item of service based on a plan exclusion does not render the claim eligible to be challenged at IDR. Put bluntly, the IDR Entity is not a clinician, and its job is not to scrutinize or invalidate complete denials. The IDR Entity is much more like an arbitrator than a judge; its job is to choose between two payment amounts, not to decide whether a given denial was appropriate.

To reiterate, if a claim is denied entirely, it does not trigger the NSA’s IDR-related protections at all. The NSA is intended to apply to claims that are payable in some amount.

If a claim is denied in its entirety and that denial is compliant with the NSA, that claim falls outside the NSA's protections and regular plan appeals come into play. As expected, other NSA-interpreting regulations provide that external review – not the NSA's IDR, but the “ordinary” external review established by the ACA so many years ago – “must be available for any adverse benefit determination by a plan or issuer that involves medical judgment, as well as rescissions.” This was apparently meant to underscore that a complete denial of a claim – regardless of whether that claim falls under the NSA’s protections – is subject to regular appeals processes, including IRO review when applicable. That much seems intuitive, since, after all, a claim that does not fall under the NSA is an ordinary claim like any other, subject to ordinary claims and appeals guidelines.

The question then often becomes: what happens when a complete denial is overturned on appeal, and it turns out the claim did fall under the NSA after all? Our interpretation is that once a payment is made, the NSA would kick in if applicable, and that “initial” payment – even though not made "initially" – would be subject to open negotiations and IDR just as if the payment had been made "initially". If a denial is reversed, the NSA process effectively starts from there; after all, it seems like it would be the mother of all loopholes if a health plan was able to deny a claim at first, only to later reverse the denial but avoid the NSA's processes with respect to the payment.

As a final note, when trying to answer questions relating to the No Surprises Act, it's important to look through the lens of consumer (i.e., patient) protection. The Phia Group has been at the forefront of making these NSA process interpretations, and always thinking of Congressional intent – to help American workers avoid exorbitant costs – has proven invaluable in helping Phia and the industry at large navigate the NSA's complexities. As a TPA or broker, whenever you are asked to give your advice regarding the NSA and its application, we urge you to do the same.

As always, if you have any questions, please don't hesitate to reach out to Phia's consulting team!