STAT investigation increases pressure on IDR entities and need for reform; CMS continues IDR recertification process

As part of CMS’ No Surprises Act certification process for Independent Dispute Resolution (IDR) Entities (IDRE), CMS announced five certified IDREs meet the minimum qualification standards to be recertified. A petition period of five business days has been opened for the public, including providers, facilities, providers of air ambulance services, and plans or issuers, to petition for the denial of certification for any/all of those entities.

After reviewing any submitted petitions, the Departments will make a final decision on recertification. The Cigna Group is working with AHIP to express concerns with the process. Relatedly, a new investigation by STAT News (behind a paywall) found that IDREs are profiting from a system with little oversight, siding with providers in more than 80% of cases while employers and patients absorb billions in costs from inflationary IDR awards. STAT’s reporting highlights how IDREs “perform their work largely in secret, with little accountability or oversight. And their decisions are effectively set in stone, after multiple judges ruled that courts can’t overturn them.”

Melissa Bartlett, senior vice president of health policy at The ERISA Industry Committee, said “The [arbitrators] are essentially operating as mini gods, above the law, so to speak, from regulators and the courts.” Misaligned incentives encourage IDREs to side with providers, with one study finding that arbitrators that favor providers in over 90% of disputes tend to have the highest caseloads, suggesting that providers pick them based on their previous experience.

The investigation highlights one company, iMPROve, which faced financial uncertainty before becoming an IDRE. After three years its revenue grew 13-fold and its profit margin was an “unheard of” 70%. STAT also pointed to a lack of standardization and direction from the federal agencies overseeing the arbitration system.