A new report from the country’s two leading insurance industry organizations alleges providers are “flooding” the No Surprises Act dispute process to score higher payments.
The report was released Friday by AHIP and the Blue Cross Blue Shield Association and estimates that as many as 39% of the out-of-network claims submitted to the independent dispute resolution, or IDR, process were not eligible. For example, claims for services under Medicare or Medicaid, disputes already resolved under IDR, in-network claims and claims under state surprise billing laws are ineligible.
The analysis also found that IDR entities identify improperly submitted claims less than half of the time, and, because their fees are refunded if a claim is not eligible, these entities have an incentive to allow ineligible disputes to move forward.
“These dynamics have created lucrative opportunities for some providers to exploit the IDR process, flooding it with ineligible disputes to secure higher payments that ultimately make health care less affordable for consumers and employers,” the groups wrote in the report.
The study found that 20 million claims submitted in 2024 met the criteria for the No Surprises Act, meaning millions of surprise bills were averted. In most cases (76%), no further action was required as the provider accepted the initial payment from the health plan.
Eighteen percent of disputed claims were resolved in open negotiation, and 6% entered IDR, according to the analysis.
Most qualified claims (61%) were for emergency care, while 39% were for nonemergency services. The study found that while air ambulance services only accounted for 1% of qualified claims, they had a high likelihood of proceeding to IDR and securing large payments.
The study identified more than 1.2 million claims that were submitted to IDR, with a fairly even split between emergency and nonemergency services. And, while the IDR entities identified 17% of these claims as ineligible, the plans argue 39% were instead submitted inappropriately.
This was especially true among claims for nonemergency services, of which the insurers said 45% of claims submitted to IDR were ineligible for process. Thirty-three percent of claims for emergency services were ineligible, as were 23% of those for air ambulances, according to the payer organizations.
The plans found several recurring issues that made submitted claims ineligible; for instance, in 29% of cases, the claims were submitted to IDR outside of the allotted window, while 13% of submissions were missing key details.
The report concludes that while it’s laudable that the No Surprises Act averted close to 20 million surprise bills, the dispute process is “suffering from abuse, inefficiencies, misaligned incentives and inadequate accountability.” The groups recommend policymakers institute greater oversight in the process and more stringent front-end screenings to reduce waste.
“These findings also suggest [IDR entities] are failing to identify a large volume of ineligible disputes submitted by providers,” according to the report. “Because of this, [IDR entities] are considering and issuing payment determinations on ineligible disputes.”