CMS has reduced the payment dispute initiation fee under the No Surprises Act from $350 to $50 following a court ruling that struck down the fee increase. The Texas Medical Association challenged the raise, and the US District Court’s decision in their favor prompted CMS to revert the fee. The court also invalidated the batching rule. CMS has announced plans to reopen the dispute portal, but refunds for fees paid before the ruling are not required. The Departments of Health, Labor, and the Treasury are working on new fee amounts.
CMS has reduced the fee for initiating a payment dispute under the No Surprises Act after a recent court decision invalidated a significant price increase. Following a federal court’s ruling, CMS has reverted the fee for initiating a payment dispute back to $50 under the No Surprises Act, reversing a price hike that had been implemented earlier this year.
At the beginning of 2023, the non-refundable administrative fee for a payment dispute through the law’s independent dispute resolution (IDR) process had surged from $50 to $350. This 600 percent increase was announced by CMS in a memo in December 2022, citing supplemental data analysis and increased costs associated with the Federal IDR process since the prior 2023 guidance was established.
The Texas Medical Association (TMA) contested the new fee, which was mandatory for both disputing parties. The US District Court for the Eastern District of Texas ruled in favor of TMA on August 3rd, overturning the nationwide increase in the federal fee.
Rick W. Snyder II, MD, the president of TMA, expressed concerns about the excessive fee hike affecting physicians’ ability to seek arbitration for inadequate out-of-network care payment. The court also invalidated the batching rule of the No Surprises Act due to CMS not adhering to notice-and-comment requirements.
In response to the court ruling, CMS announced through an FAQ document that the old fee of $50 would be reinstated for disputes initiated on or after August 3rd. This reduced fee would also be applied to unpaid disputes preceding August 3rd until new fee amounts are determined by the Departments of Health and Human Services, Labor, and the Treasury.
Additionally, CMS clarified that the court ruling does not mandate refunds for administrative fees paid before August 3rd. However, the FAQ document does not reopen the IDR process for new payment disputes. CMS indicated that the Departments are planning to reopen the portal for new disputes shortly and will notify stakeholders accordingly.
The IDR process had been temporarily closed by the Departments due to the court’s decision to invalidate the batching rule. This rule allowed parties to group related IDR items or services for joint payment consideration. The court found fault with the rule’s restriction to claims billed under the same code, leading to the need for separate IDR submissions.
In response to these legal developments, the Departments are working on new guidance for the IDR process and plan to reopen it once comprehensive instructions are available.
