CurrentMedicarePolicy N/A

Federal Independent Dispute Resolution (IDR) Process Guidance for Disputing Parties

Guidance for disputing parties (out-of-network providers, facilities, air ambulance providers, and plans/issuers/carriers) on using the Federal IDR Process under the No Surprises Act to resolve payment disputes for qualified out-of-network items and services.

Policy Summary

PayerMedicare

PolicyFederal Independent Dispute Resolution (IDR) Process Guidance for Disputing Parties

Policy CodePolicy N/A

Change TypeUpdated guidance (Dec 15, 2023) to July 26, 2022 effective guidance

Effective DateJul 26, 2022

Next Review DateN/A

Key ActionSubmit a claim and initiate open negotiation within 30 business days of the plan's initial payment or denial; if unresolved, submit a Notice of IDR Initiation within 4 business days after the open negotiation ends.

SourceLink

30 bdopen negotiation period length

30 daysplan initial payment/denial timeframe

Federal portaladministration

Jan 1, 2022effective for plan years from

10 bdoffer submission deadline

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certified IDR entity selection window

Federal IDR Coverage & Decision Criteria

Prohibited Factors

When making a payment determination under the Federal Independent Dispute Resolution (IDR) Process, certified IDR entities are prohibited from considering certain factors. The following are factors that must not be used by a certified IDR entity in selecting between offers or determining the appropriate out-of-network (OON) rate.

The certified IDR entity must not consider the provider's, facility's, or provider of air ambulance services' usual and customary charges, including any payment or reimbursement rates expressed as a proportion of usual and customary charges.

The certified IDR entity must not consider the amount that would have been billed by the provider, facility, or provider of air ambulance services for the qualified IDR item or service had the balancebilling provisions (45 CFR 149.410, 149.420, and 149.440, as applicable) not applied.

The certified IDR entity must not consider the payment or reimbursement rate for items and services payable by a public payor. This prohibition includes, but is not limited to, rates payable by Medicare (Title XVIII), Medicaid (Title XIX), the Children’s Health Insurance Program (Title XXI), TRICARE, VA, or demonstration projects under Section 1115 of the Social Security Act, and also prohibits consideration of rates expressed as a proportion of public payor rates.

Codes, QPA, Batching & Related Coding Rules

Qualified servicesmixed

Qualified IDR items or services

Emergency items or services furnished by an OON provider or facility; non-emergency items or services furnished by an OON provider at an in-network facility where the covered individual did not receive advance notice or did not provide adequate consent; air ambulance services furnished by OON air ambulance providers.

Required service identifiersmixed

service codes

Corresponding service and place-of-service codes must be included in the Notice of IDR Initiation when identifying disputed items/services (also include description, dates of service, location, whether batched, type of item/service, cost sharing, and initial payment amount).

Batching and bundling rulesmixed

N/A

Batched submissions allowed when multiple qualified IDR items or services are billed by the same provider/group under same NPI/TIN, paid by same plan, related to treatment of a similar condition, and furnished within same 30-business-day period; bundled arrangements (e.g., billed under a single service code such as a DRG) may be submitted as one determination and are subject to the same certified IDR entity and administrative fees as single determinations.

Bundled payment examplemixed

DRG (example)

A bundled arrangement where multiple items or services are billed under a single service code (for example, a DRG) and submitted as one payment determination; bundled arrangements follow batched determination rules and incur the same certified IDR entity and administrative fees as single determinations.

Service codes referencedmixed

CPT/HCPCS/DRG

Service code types used to identify and describe an item or service: Current Procedural Terminology (CPT), Healthcare Common Procedure Coding System (HCPCS), or Diagnosis-Related Group (DRG) codes.

inv-15: QPA disclosure (plan must provide QPA with initial payment/denial)

What must be disclosedThe plan must provide the Qualified Payment Amount (QPA) for each item or service with the initial payment or notice of denial and a statement certifying that the QPA applies and was determined in compliance (using a good-faith, reasonable interpretation of applicable rules).

When disclosedWith each initial payment or notice of denial of payment, delivered within 30 calendar days of claim submission.

FormatInformation must be provided in writing (electronically or paper), and include the QPA for each item/service involved.

Legal referencesDisclosure requirements are described in 26 CFR 54.9816-6T(d), 29 CFR 2590.716-6(d), and 45 CFR 149.140(d).

What Providers & Plans Must Do (timing, notices, submissions)

Billing Rule

Claim submission and initial payment/denial notice requirements

Provider submits claim to the plan. The plan must process the claim and, if it covers the claim, send an initial payment or a notice of denial to the provider within 30 calendar days. The initial payment should reflect the amount the plan reasonably intends to be payment in full based on relevant facts and circumstances prior to any open negotiation or initiation of the Federal IDR Process. The plan must include with the initial payment or denial certain information in writing (electronically or paper), including the Qualified Payment Amount (QPA) for each item or service, certification that the QPA applies and was determined in compliance with the rules, and contact information (telephone and email) for the person or office to initiate open negotiation. The notice must also state that the provider may initiate a 30-business-day open negotiation period and that, if negotiations do not result in agreement, the provider generally may initiate the Federal IDR Process within 4 business days after the end of the open negotiation period.

Plan must send initial payment or denial within 30 calendar days
Initial payment should be intended as payment in full prior to open negotiation/IDR
Notice must include QPA, certification that QPA applies, and contact info for open negotiation
Notice must state option to initiate 30-business-day open negotiation and timeline to initiate IDR

Key Definitions

inv-28: Eligible items and services for Federal IDR (qualified IDR items/services)

Eligible categoriesEmergency services by out-of-network providers/facilities; non-emergency out-of-network services furnished at an in-network facility where required notice/consent was not provided; and out-of-network air ambulance services.

ExclusionsItems or services for which an OON rate is determined by reference to an All-Payer Model Agreement or specified state law are not eligible for the Federal IDR Process.

Validity requirementTo be a qualified IDR item or service, a valid Notice of IDR Initiation must be submitted after an exhausted open negotiation period (when applicable).

inv-29: QPA (payment amount used by plan and disclosed with initial payment/denial)

What QPA is for offersPlans must provide the QPA for the applicable year for the same or similar item or service; parties must reference the QPA when submitting offers (offers include dollar amount and percentage of the QPA).

Policy Summary

PayerMedicare

PolicyFederal Independent Dispute Resolution (IDR) Process Guidance for Disputing Parties

Policy CodePolicy N/A

Change TypeUpdated guidance (Dec 15, 2023) to July 26, 2022 effective guidance

Effective DateJul 26, 2022

Next Review DateN/A

SourceLink

On This Page

inv-16: QPA disclosure (QPA must be included in Notice of IDR Initiation)

QPA included in Notice of IDR InitiationThe Notice of IDR Initiation must include the QPA for each disputed service and the plan's statement that the QPA applies for purposes of the recognized amount (or for cost sharing for air ambulance).

Related QPA detailWhere requested, the plan should provide information about how the QPA was calculated (e.g., non-fee-for-service rates, eligible databases, related service codes, incentive adjustments).

Timing and purposeQPA information in the notice supports the certified IDR entity's review and must accompany the formal initiation to the Departments and other party.

inv-17: Offer submission deadline

Deadline to submit offersEach party must submit its offer to the certified IDR entity no later than 10 business days after selection of the certified IDR entity.

Offer content timingAll additional information relating to an offer (excluding prohibited factors) must also be submitted no later than this 10-business-day deadline.

Consequence of missing deadlineIf a party fails to submit an offer or pay required fees by the deadline, the certified IDR entity will select the other party's offer as the final payment amount.

inv-18: Batched determination prevail metric

How prevail is determined for batched claimsFor batched claims where multiple determinations may be made, the party with the fewest determinations in its favor is the non-prevailing party and is responsible for paying the certified IDR entity fee.

Tie outcomeIf each party prevails in an equal number of determinations, the certified IDR entity fee is split evenly between the parties.

Administrative fee for batchesA single administrative fee is collected from each party for batched claims.

inv-19: Qualifying Payment Amount (QPA) definition

Core definitionQPA generally means the median of the contracted rates recognized by the plan for the same or similar item or service provided by a provider in the same or similar specialty and geographic region, increased by inflation.

Calculation standardThe plan calculates the QPA using a good-faith, reasonable interpretation of the applicable statutes and regulations (accounting for adjustments after TMA III).

Role in processThe QPA is the payment amount the plan uses and discloses with the initial payment or notice of denial and is a key input for the certified IDR entity's determination.

Prior Authorization

Open negotiation initiation and timing

To initiate open negotiation the initiating party must send a written open negotiation notice to the other party within 30 business days of receiving the plan's initial payment or denial. The notice must identify the items/services (dates, service codes, location), state the initial payment amount or denial, include an offer for an OON rate, and provide contact information for the sender. Electronic delivery (e.g., email) is permitted if the sender reasonably believes the method is readily accessible to the recipient and paper notice is provided free of charge on request. Take steps to confirm recipient contact information and confirm receipt (for example, read receipts), because failure to properly provide notice may prevent the open negotiation period from starting and could render any later certified IDR determination unenforceable.

Open negotiation notice must be sent within 30 business days of the plan's initial payment or denial
Notice must include dates, service codes, initial payment/denial amount, OON rate offer, and sender contact info
Electronic delivery allowed if readily accessible and paper copy available on request
Confirm receipt to avoid failure to start open negotiation period

Note

Notice of IDR Initiation delivery and timing

If the 30-business-day open negotiation period does not produce an agreed amount, either party may initiate the Federal IDR Process by submitting a Notice of IDR Initiation to the other party and to the Departments within 4 business days after the close of the open negotiation period (i.e., starting on the 31st business day after the open negotiation began). The Notice of IDR Initiation may be delivered electronically if the initiating party reasonably believes the method is readily accessible and must be provided in paper form free of charge upon request. The initiating party must also submit the Notice to the Departments through the Federal IDR portal on the same day it is furnished to the non-initiating party; the initiation date is the date the Departments receive the notice.

IDR initiation window: within 4 business days after close of 30-business-day open negotiation
Notice may be sent electronically if accessible and paper copy provided on request
Notice must be submitted to Departments via the Federal IDR portal on same day delivered to other party
Initiation date = date Departments receive the Notice

Documentation Required

Required content of the Notice of IDR Initiation

The Notice of IDR Initiation must include the initiating party type; names and contact information for both parties (email, phone, mailing address); sufficient identification of the disputed items/services (description, whether batched, dates furnished, location/state, service and place-of-service codes, type of service); amount of cost sharing allowed; amount of initial payment made (if any); the QPA for each service; and the plan-provided QPA information that accompanied the initial payment or denial (including statements about how the QPA was determined and any related service codes or databases used). The initiating party should also include its preferred certified IDR entity in the Notice.

Include initiating party type and full contact information for both parties
Identify items/services with dates, location, codes, and whether batched
Include initial payment amount (if any), allowed cost sharing, and QPAs
Include plan-provided QPA details and any related-service-code or database information
Include preferred certified IDR entity

Note

Certified IDR entity selection process

After IDR initiation the non-initiating party has up to 3 business days to object to the initiating party's preferred certified IDR entity; if it does not object, selection defaults to the initiating party's preferred certified IDR entity unless a conflict of interest exists. If the non-initiating party objects, it must propose an alternative certified IDR entity. The initiating party must then submit a Notice of Certified IDR Entity Selection within the next business day following the 3-business-day selection period indicating agreement or failure to select. If the parties cannot agree on a certified IDR entity within 6 business days from IDR initiation, the Departments will randomly select a certified IDR entity. The certified IDR entity must attest regarding conflicts of interest within 3 business days of selection and notify the Departments and parties within 3 business days if it determines the Federal IDR Process does not apply.

Non-initiating party has 3 business days to object to initiating party's preferred certified IDR entity
Initiating party must submit Notice of Certified IDR Entity Selection within 1 business day after that period
Departments randomly select the certified IDR entity if no agreement within 6 business days of initiation
Certified IDR entity must attest to COI rules within 3 business days and notify if IDR does not apply

Billing Rule

Offer submission requirements and allowed supporting information

Each party must submit its offer to the selected certified IDR entity no later than 10 business days after certified IDR entity selection. Offers must state a dollar amount for the OON rate and the equivalent percentage of the QPA. For batched items with differing QPAs, parties should provide the distinct QPAs and may provide different offers per item or service. Parties must also provide information requested by the certified IDR entity and may submit additional credible information relevant to the offer (subject to prohibitions on certain factors). Providers must include practice size and specialty/type; plans must include coverage area, geographic region used for QPA, and insurance type (fully insured or self/partially insured); and parties may submit other permissible supporting information no later than the 10-business-day deadline.

Offers due within 10 business days after certified IDR entity selection
Offer must include dollar amount and percentage of QPA
Provide per-item QPAs and offers when batching involves different QPAs
Include requested additional information and permissible supporting documentation
Provider details: practice size and specialty; Plan details: coverage area, geographic region, insurance type

Billing Rule

Payment of certified IDR entity and administrative fees

Each party must pay the certified IDR entity fee and the administrative fee at the time it submits its offer. An offer will not be considered received by the certified IDR entity until the certified IDR entity fee and the administrative fee have been paid. If an offer is not considered received from one party, the certified IDR entity will select the other party's offer as the final payment amount. The certified IDR entity may bill/invoice administrative fees at the time parties select the certified IDR entity and must collect them by the time offers are submitted; administrative fee amounts are published annually by the Departments.

Certified IDR entity fee and administrative fee must be paid with offer submission
Offer not considered received until both fees are paid
If one party's offer is not received, the certified IDR entity will select the other party's offer
Administrative fee amount published annually by the Departments

Disclosure pointsThe QPA must be disclosed with the initial payment/denial and included in the Notice of IDR Initiation; plans must also provide QPA used to determine the offer when requested by provider/facility.

Computation noteQPA is calculated as the median of contracted rates recognized by the plan for same/similar item/service in same specialty and region, adjusted for inflation, using a good-faith interpretation of rules.

inv-30: Open negotiation notice requirements

What the open negotiation notice must containA written notice of intent to negotiate that identifies dates of service, corresponding service codes, the initial payment amount or notice of denial, an offer for the OON rate, and sender contact information.

Timing for sendingThe open negotiation notice must be sent within 30 business days of the plan's initial payment or notice of denial and may be provided electronically if accessible to the recipient.

Effect of improper noticeIf the open negotiation notice is not properly provided, the Departments may determine the 30-business-day period has not begun, which can affect enforceability of later determinations.

inv-31: Notice of IDR Initiation required contents

Required contents (summary)The Notice of IDR Initiation must identify initiating party type and contact information for both parties; describe the disputed qualified items/services (including service/place codes, dates, location, batched status), state the QPA(s) and related QPA information provided with the initial payment/denial, give the open negotiation start date, name the initiating party's preferred certified IDR entity, include an attestation that the items/services are qualified, and provide general Federal IDR Process information.

Submission requirementThe initiating party must submit the Notice of IDR Initiation to the non-initiating party and to the Departments via the Federal IDR portal on the same day; the Departments' receipt date is the initiation date.

Supporting QPA detailThe notice should include plan statements about QPA calculation, related service codes, eligible databases, and whether contracted rates include risk-sharing or incentive-based adjustments when requested.

inv-32: Certified IDR entity conflict of interest attestation timing

Attestation timingWithin 3 business days of selection, the certified IDR entity must submit an attestation that it does not have a conflict of interest with the parties.

If no attestationIf the certified IDR entity fails to attest, the Departments will notify the parties and the parties have 3 business days to select another entity or the Departments will randomly select another certified IDR entity.

Applicability determinationWithin 3 business days the certified IDR entity must also determine whether the Federal IDR Process applies and notify the Departments and parties if it concludes the process does not apply.

inv-33: QPA explanation

What to explainThe QPA explanation must state the QPA for each applicable service and that the plan certifies the QPA applies for the recognized amount (or for cost sharing for air ambulance), and, when requested, provide details about how the QPA was calculated (e.g., databases, related codes, non-fee-for-service rates, incentive adjustments).

Where providedThis explanation is provided with the initial payment/notice of denial and the Notice of IDR Initiation (the plan's QPA statements and supporting info).

PurposeThe explanation informs the certified IDR entity and the opposing party about the plan's QPA methodology to support offer evaluation.

inv-34: Conflict of Interest (COI) definition summary

Definition summaryConflict of interest exists when the certified IDR entity (or its personnel/contractors) has a material familial, financial, or professional relationship with a party to the dispute, plan officials, or providers/facilities that impacts the entity's ability to make an unbiased payment determination.

Examples of relationshipsIncludes personnel who have familial ties, ownership/financial interests exceeding thresholds, employment/partnership, or other affiliations with a party, the plan, or facility involved in the dispute.

ConsequenceA selected certified IDR entity must attest no conflict within 3 business days; failure to attest triggers reselection or Departments' intervention.

inv-35: Batched items or services definition

What 'batched' meansBatched items or services are multiple qualified IDR items or services considered jointly as part of a single payment determination by a certified IDR entity when they meet statutory criteria and are related to treatment of a similar condition.

Criteria for batchingBatched claims typically must meet criteria such as same provider/group (NPI/TIN), same plan payor, related to similar condition, and furnished within the same 30-business-day period; different QPAs in a batch must be provided and considered separately.

Outcome handlingThe certified IDR entity may make different determinations for each item in a batch; fee allocation depends on the number of favorable determinations per party (fewest wins pays the certified IDR fee).

inv-36: Bundled arrangement definition

What 'bundled arrangement' meansA bundled arrangement is when multiple items or services are billed under a single service code or when a plan's initial payment/denial uses a single code that represents multiple items or services (e.g., a DRG).

How handled in IDRBundled arrangements are subject to the rules for batched determinations; certified IDR entity may treat them as a single payment determination, and fees are the same as for single determinations.

ExampleA DRG-style payment representing multiple services billed under one service code is a bundled arrangement.

inv-37: Certified IDR entity definition

Core definitionA certified IDR entity is an entity certified by the Departments that meets specified certification criteria in the cited regulations and is responsible for conducting determinations under the Federal IDR Process.

ResponsibilitiesOnce selected, the certified IDR entity must attest no conflict of interest within 3 business days, determine applicability of the Federal IDR Process, collect offers and fees, and issue a written decision with rationale within 30 business days of selection.

Selection processParties may jointly select a certified IDR entity; if they cannot agree, the Departments will randomly select one within specified timeframes.

inv-38: Conflict of interest definition (alternate wording)

Alternate wording — COIA conflict of interest means a material relationship, status, or condition of the certified IDR entity or its personnel that impacts the ability to make an unbiased payment determination, including affiliations with plans, providers, or related entities.

ScopeIncludes affiliations with group health plans, issuers, FEHB carriers, providers, facilities, affiliates, subsidiaries, or professional/trade associations.

Operational effectPresence of a conflict requires the certified IDR entity to recuse or prevent assignment; failure to attest leads to reselection procedures.

inv-39: Batched items or services (alternate)

Alternate — batched definitionMultiple qualified IDR items or services considered jointly as part of a single payment determination when they meet regulatory criteria and relate to treatment of a similar condition.

Regulatory basisBatched items must meet criteria set forth in the cited CFR sections (e.g., same NPI/TIN, same plan, related condition, within same 30-business-day period).

Practical noteDifferent QPAs in a batch must be provided and can be considered separately by the certified IDR entity.

inv-40: Bundled arrangement (alternate)

Alternate — bundled arrangementBilling multiple items or services under a single service code or making an initial payment/denial under a single code representing multiple items/services (e.g., DRG); treated under batched rules for determinations and fees.

Fee implicationCertified IDR entity fee and administrative fee for bundled arrangements are the same as for single determinations.

Submission noteBundled arrangements may be submitted as one payment determination to the certified IDR entity.

inv-41: Certified IDR entity (alternate)

Alternate — certified IDR entityAn entity certified under the specified regulatory provisions that conducts Federal IDR determinations, must meet certification criteria, attest no conflicts, and follow procedural timelines.

Duties upon selectionAttest no COI within 3 business days, determine applicability of the Federal IDR Process, manage offer submissions, collect fees, and issue a decision within 30 business days.

Certification basisCertification criteria are specified in 26 CFR 54.9816-8T(e), 29 CFR 2590.716-8(e), and 45 CFR 149.510(e).

inv-42: Conflict of interest (alternate wording)

Alternate COI wording (expanded)A conflict of interest is a material relationship, status, or condition that impacts a certified IDR entity's ability to make an unbiased payment determination; it includes specified affiliations and material familial, financial, or professional relationships with parties, plan officers, or providers involved in the dispute.

Specified affiliationsExamples include being a group health plan, issuer, carrier, provider, facility, affiliate, or subsidiary, or having personnel with material relationships to such entities.

Materiality thresholdsMaterial financial relationships are defined (e.g., financial interest >5% of annual revenue or income) and material professional/familial relationships are described in Appendix A.

inv-43: Health care facility definition

DefinitionHealth care facility (for non-emergency services under group health coverage) includes: hospital (per Section 1861(e) of the Social Security Act), hospital outpatient department, critical access hospital, and ambulatory surgical center (per Section 1833(i)(1)(A)).

ContextThis definition applies when determining applicability of the Federal IDR Process for non-emergency services furnished at in-network facilities.

ReferenceSee Appendix A definitions for statutory citations.

inv-44: Material familial relationship definition

Material familial relationshipAny relationship such as spouse, domestic partner, child, parent, sibling, spouse's or domestic partner's parent, spouse's or domestic partner's sibling, spouse's or domestic partner's child, child's parent, child's spouse or domestic partner, or sibling's spouse or domestic partner constitutes a material familial relationship.

RelevanceSuch relationships between certified IDR entity personnel and a party may create a conflict of interest that must be disclosed and avoided.

Procedural effectPresence of a material familial relationship triggers COI procedures, including potential reselection of the certified IDR entity.

inv-45: Material financial relationship definition

Material financial relationship thresholdA material financial relationship means any financial interest of more than five percent of total annual revenue or total annual income of a certified IDR entity or certain relevant personnel.

Who it applies toApplies to a certified IDR entity or an officer, director, manager, or reviewer/reviewing physician engaged by the certified IDR entity.

ExclusionAnnual revenue/income does not include mediation fees received by mediators acting solely as mediators and not representing a party.

inv-46: Material professional relationship definition

Material professional relationship definitionAny physician–patient relationship, partnership or employment relationship, shareholder or ownership interest in a professional entity, or an independent contractor arrangement that constitutes a material financial relationship with experts or officers used by the certified IDR entity.

ImpactMaterial professional relationships between certified IDR personnel and parties may create a conflict of interest requiring recusal or reselection.

ExamplesIncludes prior employment, partnerships, ownership stakes, or contractual arrangements with parties to the dispute.

inv-47: Qualified IDR item or service definition

Qualified IDR item/service — summaryA qualified IDR item or service is an emergency service from an out-of-network provider or facility, a non-emergency OON service at an in-network facility subject to the NSA, or an OON air ambulance service for which a valid Notice of IDR Initiation is submitted after unsuccessful open negotiation.

PrerequisiteThe open negotiation period must have lapsed without agreement for the Notice of IDR Initiation to be valid and for the item/service to be eligible.

LimitationsFederal IDR Process does not apply where an All-Payer Model Agreement or specified state law determines the OON rate.

inv-48: Qualifying Payment Amount (QPA) detailed definition

Detailed QPA definitionThe QPA is generally the median of the contracted rates recognized by the plan for the same or similar item or service provided by a provider in the same or similar specialty and geographic region in which the disputed item/service was furnished, increased by inflation; calculated using a good-faith, reasonable interpretation of applicable statutes and regulations.

Calculation referencesMethodologies differ by jurisdiction (Treasury, HHS, DOL regulations) but follow the cited rules and FAQs for specific plan types.

Use in processQPA is used in initial disclosures, in the Notice of IDR Initiation, and as the basis for offers (offers must state dollar amount and percentage of QPA).

inv-49: Recognized amount definition

Recognized amount — definition'Recognized amount' means: (1) an amount determined by reference to an applicable All-Payer Model Agreement; (2) if none, an amount determined by reference to a specified state law; or (3) if neither applies, the lesser of the amount billed by the provider/facility or the QPA.

Role for cost sharingFor cost sharing and certain calculations, the QPA may be used where recognized amount refers to QPA under the regulations when no other reference applies.

ReferenceSee Appendix A definition of 'Recognized amount' and regulatory citations for methodologies.