No Surprises Act IDR Disputes: Insurers Report Surge in Ineligible Claims. What Are the Financial Implications for CFOs?

Insurers report that nearly 40% of payment disputes filed under the No Surprises Act's independent dispute resolution (IDR) process are ineligible.

A recent joint report from America's Health Insurance Plans (AHIP) and the Blue Cross Blue Shield Association (BCBSA) found that insurers identify roughly 39% of all disputes submitted to the federal independent dispute resolution (IDR) process under the No Surprises Act (NSA) are ineligible, and that rate rises to about 45% for non-emergency service disputes.

The NSA established the IDR mechanism to resolve payment disagreements between out-of-network providers and health plans for certain qualified items and services -- specifically, emergency services provided by out-of-network providers, non-emergency out-of-network services at in-network facilities, and out-of-network air ambulance services.

According to the report, common grounds for ineligibility include: claims for services already payable under Medicare or Medicaid, ; disputes that had already been resolved through the IDR process and then were resubmitted, ; attempts to leverage the IDR process when the provider is part of an in-network arrangement (and thus the service isn't eligible); and instances where a state surprise-billing law applies instead of the federal process.

Furthermore, the report raises concerns that IDR entities (IDREs) themselves are failing to adequately screen out ineligible disputes, meaning that many allegedly ineligible cases are being accepted for determination, which increases administrative burden and cost for payers.

From the payer side, the business implications run deep. The IDR process has proven expensive to administer and is diverting resources from patient care or premium relief. On the provider side, there is potential exposure to increased scrutiny or challenge if large volumes of disputes are later deemed ineligible.

Interestingly, once arbitration decisions are made, plans pay nearly three-quarters of awards within 30 days (41% paid in 15 days). Delays tend to stem from provider errors (missing or incorrect contact data, missing documentation) or processing backlog due to high volume of disputes. This underscores the significant challenges providers often face with managing large datasets.

The CFO Takeaway

For CFOs, this landscape carries several actionable take-aways:

1. Audit your dispute-submission protocols. Since nearly half of non-emergency service disputes are flagged by payers as ineligible, your revenue cycle, compliance and billing teams need robust filters to test eligibility before submission to the IDR process and to ensure that the claims are indeed eligible. Errors cost time and administrative effort, and may undermine your credibility in dealing with payers in the future.
    
2. Understand your eligibility criteria thoroughly. The NSA sets out specific items/services, negotiation windows and cooling-off periods, establishes a requirement to attempt open negotiation, and notes that state surprise-billing laws may pre-empt federal IDR. Continuous training of billing/legal teams is essential to avoid misfiled claims.
    
3. Monitor and mitigate cost risk exposure. If your organization is submitting large volumes of disputes that later get rejected as ineligible, you may incur avoidable costs (administrative expense, or reputational risk with payers) and lost time. CFOs should track key metrics like submission-to-eligibility ratio, rejection rates, time to payment, and cost per dispute.
    
4. Strengthen documentation and processes. Delays in payment of valid awards are often tied to provider submission errors (e.g., missing contact information). Standardizing file-checklists, tracking dispute status, and partnering with specialty billing/IDR organizations might reduce delays and improve cash-flow.
    
5. Engage in strategic payer relations. Given payer concerns about over-use of the IDR mechanism by providers, CFOs should work proactively with payers to reduce “waste” disputes and build shared frameworks of transparency. Thorough communication may help reduce adversarial costs and create better revenue certainty.