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Independent Dispute Resolution Fees – Final Rule Issued

April 3, 2024

The Internal Revenue Service, Employee Benefits Security Administration, and the Centers for Medicare & Medicaid Services (“the Departments”) issued final rules concerning fees established by the No Surprises Act for the Independent Dispute Resolution (IDR) process. 

Those rules were issued via a notice and comment rulemaking process after a federal court overturned portions of the previous guidance, which was supposed to take effect on January 1, 2023.

The final rules provide for an administrative fee these agencies charge to participate in the IDR process and include the methodology for determining that fee. The rules also determine the certified entity IDR fees range for single and batched determinations. The final rules went into effect on January 22, 2024.

Under the final rules, the administrative fee for disputes initiated on or after January 22, 2024, is $115 per party. This fee is an increase from the previous fee of $50 per party per dispute. Fee amounts will be set via the notice and comment rulemaking process once per calendar year at the very most. 

As to the methodology used, the Departments will take the estimated number of administrative fees paid to certified IDR entities to estimate the total number of administrative fees paid. The Departments also estimate the expenditures of the federal IDR program to be approximately $56.6 million. The changes to the proposed rules will result in lower administrative fees than initially anticipated, as those rules reflected a $150 per party rate.

These final rules also called for changes to the range of IDR fees for single and batched disputes. These fee ranges will be set through notice and comment rulemaking, at most annually.

Certified IDR entities must provide separate fixed fees for single determinations and batched determinations within the permissible upper and lower limits set by the Departments. An entity may request approval from the Departments to update their fees one additional time per year.

For any disputes that are initiated on or after January 22, 2024, certified IDR entities can charge a fixed certified IDR entity fee for single determinations within the range of $200 to $840 and for batched determinations within the range of $268 to $1,173. 

These entities can also charge a fixed tiered fee of $75 to $250 for every twenty-five line items within a batched dispute beginning with the twenty-sixth line item. 

You may ask, “How does this affect employers and the group plans they provide to their employees?” Employees need an outlet to address their claim issues. Usually, for larger companies, it is an HR department, but for some smaller companies, it is the owner, the CFO, etc. They, in turn, reach out to the broker for assistance and claim adjudication. It is crucial that employers have a basic understanding of the No Surprises Act and the new rules addressing disputed surprise billing.

MZQ Consulting assists employers with educational and informational tools in this area. Please reach out to us.