American Health Policy Institute
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Ongoing Surprise Billing Litigation May Increase Employer Costs

A Texas Medical Association (TMA) legal challenge to the final surprise billing rule is creating delays in determining independent dispute resolution (IDR) claims, which may increase costs for employers.

Background: The final rule took effect on October 25 and revised several aspects of the interim rule after a federal judge struck down several key provisions regarding the IDR process. HR Policy joined other employer groups after the ruling arguing that the new rule established appropriate guardrails around the arbitration process as it instructs arbiters to only consider credible factors. 

Backlog of IDR cases piling up: The continuing legal challenges and lack of IDR determinations to date makes providers less likely to want to settle their disputes with employers in the 30-day window before the IDR process starts.  The complexity of determining whether a claim is even eligible for the IDR process is also helping to create the backlog. To date, arbitrators have found at least 22,000 claims to be ineligible for the IDR process, a time-consuming process that underscores the need for a clearly defined IDR process.

Outlook: If the TMA prevails in its litigation, it will become much more difficult to predict the outcome of arbitration, increasing administrative costs for all parties and as a result, increasing health care costs for employers and employees, the opposite effect of the rule’s intent.

Margaret Faso

Director of Health Care Research and Policy, American Health Policy Institute and HR Policy Association

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