Providers are often waiting months for insurers to pay out-of-network bills, leading to strapped finances and a pile up of complaints and lawsuits.
Physician groups have filed hundreds of complaints with the federal government and sued insurers to collect overdue payments stemming from the dispute resolution process established by the No Surprises Act of 2022. In just one example, an orthopedic physician practice in New Jersey recently sued Cigna, alleging the insurer has not paid a $42,000 dispute settlement in the 30-day period required by the law.
Related: What the latest No Surprises Act ruling means for pay rates
The lawsuit adds to a growing list of questions around the No Surprises Act's implementation, including a disagreement among federal courts on whether organizations are compelled to pay arbitration determinations. As physician groups wait for a resolution, their declining financial position has stoked care access concerns.
Here’s what to know about providers' payment concerns with the No Surprises Act dispute resolution process.
How do independent dispute resolutions work?
When providers and insurers don’t agree on a payment amount for out-of-network care, they can submit the dispute along with payment offers to an independent third-party entity.
A mediator considers insurers’ median in-network payment rates for services, as well as other factors such as where the patients were treated and care complexity. Both parties can object to the third-party entity.
The median rate, known as the qualifying payment amount, has been the subject of several lawsuits that allege there is too much emphasis on that amount, which insurers set.
An independent dispute resolution determination is supposed to be paid in 30 days, according to the law.
Why are physicians suing insurance companies over the dispute resolution process?
Providers have filed dozens of lawsuits against insurers related to the dispute resolution process, most due to allegations that insurers aren't paying what mediators say they owe. Many of these cases are still winding their way through the courts, which have been split on whether insurers are required to pay.
For example, Orthopaedic Spine Specialists of New Jersey sued Cigna on Oct. 10, alleging the insurer has yet to pay claims related to a complex spinal surgery performed on June 14, 2022. Cigna does not have a network contract with the specialist group. The practice allegedly billed Cigna for two CPT codes — one for $19,072 and another for $32,392 — that were eventually submitted for an independent disupte resolution review, according to the complaint filed in the U.S. District Court for the District of New Jersey. An arbitrator ordered Cigna to pay the group $10,000 on Oct. 10, 2023, and $32,061.29 on May 28, 2024.
Cigna did not respond to a request for comment.
In another case, a Texas federal judge in May ruled in favor of the insurer Health Care Services Corp. The insurer argued that courts do not have the authority to enforce arbitration decisions. Guardian Flight, the air ambulance company that filed the lawsuit, appealed in June.
The Justice Department supported that appeal, stating in an amicus brief that "the IDR process would make little sense if the parties to a [certified IDR entity's] payment decision lacked a means for judicial enforcement."
How widespread is the issue?
Delayed payments after an IDR determination are a common issue, according to a survey of 48,000 clinicians conducted by Americans for Fair Health Care from March to April of last year. More than half of payments were not made following an IDR determination, the survey said. On average, it has taken 236 days for a payment dispute to be resolved and paid, the survey showed.
As of June 30, the Centers for Medicare and Medicaid Services had received 675 complaints regarding late payments after an IDR determination, an agency spokesperson said in a statement.
A spokesperson for AHIP, an insurer trade association, said in a statement, “Certain providers, especially those backed by private equity, are unwilling to play by the rules of the No Surprises Act and instead are relentlessly exploiting the system to maximize their own profits at the expense of patients.”
What recourse do providers have other than litigation?
While providers can file a complaint with CMS, that hasn’t been a successful strategy for Radiology Partners, said Basak Ertan, chief revenue officer for that national physician practice.
“The law says we are supposed to be paid 30 days after [an arbitration decision], but 85% of the time we are not paid in 30 days,” she said. “In one case, we have waited 765 days and counting.”
The agency can enforce payment timelines for disputes where it has jurisdiction, but not all fall under its purview, a CMS spokesperson said.
“The Health and Human Services Department, the Labor Department and the Treasury Department take this issue very seriously. The departments are not, however, a party to these transactions, so we strongly encourage parties to submit complaints to the No Surprises Help Desk, which can then refer those complaints to the appropriate enforcing agencies,” the spokesperson said.
Some states have their own surprise billing laws that would supersede the No Surprises Act. In those cases, state agencies would have jurisdiction.
Providers are hopeful that a federal bill introduced last month called the No Surprises Enforcement Act would, if passed, compel insurers to pay IDR settlements on time.
How do providers account for settlements in limbo?
Providers typically put outstanding dispute resolution claims in accounts receivable. As an accounts receivable balance grows, providers may be forced to spend less on operations or experience a credit rating downgrade and corresponding spike in borrowing costs, experts said.
“These transactions have a negative impact on both the income statement and balance sheet. With enough volume, these can ultimately lead to financial Insufficiencies and adverse credit ratings,” said Michael Kittoe, a former hospital chief financial officer and director at Kodiak Solutions, which helps health systems manage revenue cycle operations.
Can delayed payments impact access to care?
Smaller physician practices awaiting overdue arbitration payments are being forced to reduce hours or end contracts with certain hospitals, particularly those in rural communities, Ertan said.
Radiology Partners has the financial capacity to pay the IDR administrative fee and wait for a decision while maintaining current service levels, unlike smaller practices, she said. When they are forced to cut back, physician groups with slim margins must choose between more lucrative contracts with facilities located in wealthier neighborhoods and maintaining services in rural communities, Ertan said.
Dr. Bruce Scott, president of the American Medical Association, echoed care access concerns stemming from delayed arbitration payments.
“The action of health plans to ignore binding IDR determinations creates instability for physician practices and raises concerns about access to care,” he said in a statement.
UnitedHealthcare did not reply to a request for comment.
How could ongoing lawsuits impact the dispute resolution process?
A number of lawsuits challenging No Surprises Act regulations could have a substantial impact on how the IDR process functions, said Zachary Baron, an associate director of the Health Policy and the Law Initiative at Georgetown University’s O'Neill Institute.
There are several pending lawsuits, including another 5th Circuit case concerning how the qualifying payment amount is calculated. Various lawsuits and appeals in the 5th Circuit and 11th Circuit concerning whether parties can sue IDR arbitrators directly to overturn determinations remain ongoing.
The 5th Circuit in August ruled in favor of providers when it voided parts of the law related to IDR disputes, since the process skewed negotiations in insurers’ favor.