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Two clients sitting at arbitration with arbiter pointing at paperwork

September 30th Interim Final Rule Brings Clarity to the Arbitration Process

On September 30, 2021 an interim final rule (IFR) titled “Requirements Related to Surprise Billing: Part II” was released. Among other things, this IFR helps to clarify the independent dispute resolution process, and in doing so, clarifies the role of the qualifying payment amount (QPA).

Initiating Arbitration
The rule states that disputing parties must participate in a 30 business day open negotiation period to determine a payment amount. If at the end of the 30 business days the parties have failed to reach an agreement, either may initiate the independent dispute resolution process. The process must be initiated within four business days of the expiration of the 30 business day negotiation period.  

The first step of the arbitration process is selecting a certified independent dispute resolution entity:

  • The IDR entity must attest that they do not have a conflict of interest with either the payor or provider.
  • The IDR entity must be accredited by a nationally recognized and relevant accreditation organization, such as URAC , or ensure that its personnel otherwise possess the requisite training to conduct payment determinations

The parties can jointly choose the IDR entity. If they can’t agree on one, an IDR entity will be assigned.

The Arbitration Process
Once the IDR entity is selected, both parties have ten business days to submit their payment offers and supporting documentation. The IDR entity will then select one of the offers submitted. The IDR entity’s decision is binding, and payment must be made within 30 calendar days of the decision.

The Importance of QPA
The September 30th IFR establishes that when deciding on a payment amount, the IDR entity begins with the assumption that the QPA is the appropriate out-of-network amount.  The IDR entity will typically choose the offer closest to the QPA, but each party can submit information that clearly demonstrates the value of the item or service is different from the QPA.

This post was updated on November 12, 2021.