IDR Proposed Rule:  Open Negotiation Is Not a Formality – It Matters. Proposed changes would drive genuine exchange of information

Earlier this year, the Federal IDR Proposed Rule moved one step closer to finalization when it entered its official review at the Office of Management and Budget (OMB) – the last stop on its review journey.  

Recently, FHAS has been revisiting elements of the IDR process, such as common and avoidable errors that lead to ineligibility rulings, and considering how the proposed rule will impact processes like batching, which frequently drive ineligibility rulings.  In this post, FHAS is looking at the changes proposed for the Open Negotiation process; another opportunity parties have to avoid an ineligibility ruling.  

Why Change the Open Negotiation Process?   

When Congress passed the No Surprises Act (NSA), it included an important 30-business-day open negotiation process. The intent was to give health care providers and payers a defined period to resolve payment disputes on their own so they could avoid the time, cost, and administrative burden of formal arbitration.  

Unfortunately, open negotiation has fallen short of its potential. The Federal agencies that oversee the process – Health and Human Services, Labor, and Treasury, collectively “the Departments” – have received many reports that parties are not meaningfully engaging to resolve the dispute.  

Plans and Providers Agree That IDR Proposed Rule Needs to Repair Open Negotiation Process 

In its comments on the proposed rule,  America’s Health Insurance Plans noted:  “Too often, health insurance providers, typically the non-initiating parties in disputes, are unaware of requests for open negotiation or IDR, not in receipt of essential information or documentation…or unable to contact the appropriate representative on the other side.”   

The American Hospital Association also offered comments on the proposed rule and noted: “Failure by plans to meaningfully engage in the open negotiation process has rendered it ineffective.”   

Both agree that changes proposed would help ensure that open negotiations are a genuine exchange of information and effort to reach agreement – and not a check-the-box exercise or a formality on the way to arbitration.  

What changes are proposed?  

Several concrete changes are under consideration.  

First, the Departments propose to create a clear front door to the open negotiation process by requiring the initiating party to submit an open negotiation notice through the Federal IDR portal. Along with this notice, the party must include a copy of the remittance advice or the notice of denial of payment.  

This change would create a clear, documented record that open negotiation was properly initiated, along with firm start and end dates. Today, these dates can be time consuming to verify and often lead to ineligibility.  

Second, the proposed rule expands requirements of the open negotiation notice to include three important pieces of information:  

• Clear identification of the specific item or service at issue 

• The reasons provided for the denial of payment or the basis for the original payment amount 

• An affirmative statement of whether the federal IDR process applies to the dispute 

To meet these requirements, the parties must review the case for eligibility before submitting an open negotiation notice.  

Third, the Departments propose to mandate that the receiving party respond, in the IDR Portal, within 15 business days.  Currently, the party receiving the open negotiation notice is not required to respond, leaving the initiating party with no information or counterproposal to consider during the open negotiation window. This proposal creates accountability for genuine engagement in the process.  

The Proposed Rule Fact Sheet summarizes the impact of the changes to open negotiation as follows:  

“These proposed changes would create more certainty regarding whether and when an open negotiation period occurred by ensuring that start and end dates are documented in the Federal IDR portal. Additionally, these proposed changes may reduce the number of ineligible disputes initiated by requiring the exchange of eligibility information through the open negotiation notice and the open negotiation response notice.”  

As always, the FHAS Account Services team is available to discuss and explain the proposed rules further, to help define specific impacts to your organization’s processes and procedures, and to help clarify how providers and payors might prepare to implement them. We welcome you to contact us at IDRE@FHAS.com.