By Kennah Watts and Jack Hoadley
The No Surprises Act (NSA) bans providers and facilities from sending consumers balance bills for certain services and thus protects consumers from surprise out-of-network (OON) bills in certain scenarios. When an OON provider and a payer cannot agree on a payment amount, the parties may enter into the independent dispute resolution (IDR) process. When this happens, both parties submit a payment amount and rationale, then a third-party arbitrator (IDR entity) selects and binds both parties to one offer. The IDR entities are required to “determine an appropriate payment amount” and have come to play an instrumental role in OON payments.
The Centers for Medicare and Medicaid Services (CMS) regularly release public use files (PUFs) on cases resolved through the IDR process. These files shed light on dispute outcomes and the prevailing party payment amounts. The PUFs allow researchers to examine trends in IDR use and to assess the effectiveness of NSA implementation. Previous analysis has shown unexpectedly high use of the IDR process, mostly by a small set of private-equity-backed provider organizations, with providers winning the vast majority of cases and winning large awards. This article builds on our previous analysis to discuss IDR entities’ role in the IDR process and outcomes. While IDR entities are not identified in the PUFs, we developed a method to identify the IDR entities, and we report here on their dispute volumes, determinations in favor of providers, and days to determination. As relevant, we also include observations from semi-structured conversations with stakeholders involved in the IDR process.
Background
After dispute initiation, the parties must select an IDR entity within three business days. Both parties have the opportunity to suggest or veto IDR entities. If there is no agreement, the Departments randomly select an IDR entity. In 2022, CMS certified 13 organizations to serve as IDR entities. As established in the NSA and described by CMS, to be certified, entities must demonstrate expertise in arbitration and claims administration; managed care; billing and coding; and health care law. While some entities vary in services offered, and most existed prior to the NSA, some work exclusively in IDR arbitration.
There are two fees assessed to the parties on a claim: an IDR entity fee and an administrative fee. The administrative fee is $115 per dispute (originally set by CMS guidance at $50 but then raised in 2024 through a final rule). Each IDR entity must select an IDR entity fee amount within CMS’s current predetermined upper and lower payment range: from $200 to $840 for single claims and $268 to $1,173 for batched determinations. These fees can and have changed, as shown in the 2023 and 2022 lists of IDR entity’s fees for single and batched disputes.
Both parties must pay the IDR entity fee up front. If the IDR entity determines the case is eligible and reaches a resolution, the entity must refund the prevailing party’s fee. The entity retains the non-prevailing party fee as compensation, and IDR entities are only paid for eligible cases. Both parties must pay the non-refundable administrative fee, remitted to the Departments. If either party does not pay, the other party prevails by default.
The IDR entity arbitrates the dispute and must consider the qualifying payment amount (QPA), among other factors designated in the law, and any additional non-prohibited information submitted by both parties. Given the intent of the bipartisan congressional NSA sponsors to have OON billing disputes adjudicated fairly and impartially, one might expect determinations to be evenly split between payers and providers, but data from 18 months of disputes indicates otherwise. In 2023, providers prevailed in 81 percent of disputes, and in the first half of 2024, providers won 85 percent. This significant skew raises questions of whether the patterns vary across the IDR entities.
Methodology
Since IDR entities are not identified in the PUF, we used two variables to reasonably infer which entity determined which dispute: “IDR Entity Compensation” and “Length of Time to Make Determination.” This methodology relies on several assumptions; as such, the results should be considered estimates rather than definitive analysis. We aimed to draw reasonable patterns across entities and disputes to demonstrate broad trends in determinations.
The variable “IDR Entity Compensation” is defined as the “dollar amount representing the compensation for the certified IDR entity for the dispute.” This field thus corresponds with the publicly listed fixed and batched payment amounts for each IDR entity. We limited our analysis to single determination disputes to pair the listed fixed fee amount with the compensation and identify the individual IDR entity. Isolating analysis to single cases does limit the scope of analysis: single disputes account for approximately 60 percent of resolved disputes. All results and exhibits exclude the other 40 percent of disputes that were part of batched cases.
Furthermore, while this method is accurate, it is incomplete, as multiple IDR entities may have the same fixed fee, so we cannot identify them separately. In these instances, we did not assign the case to an entity as we could not accurately distinguish the entities. For example, both Federal Hearings and Appeals Services and MCMC Services, LLC have a 2024 single determination fixed fee of $395, so we could not correlate the reported compensation of $395 to a specific entity.
We used the “Length of Time to Make Determination” variable to infer the year when the case was initiated and thus when the IDR entity fee was paid. For example, for disputes from Q1 of 2024 with times to determination greater than 410 days, we estimate the dispute was initiated in 2022. We conducted this calculation to pair all disputes with the corresponding IDR entity fixed fee amount for that year. We display the resolved cases based on the year they were initiated (12,007 total cases for 2022; 227,706 for 2023; 137,450 for 2024).
With these variables and applied methodologies, we identified IDR entities for 89 percent of single-determination cases initiated in 2022, 60 percent in 2023, and 42 percent in 2024. Given that these limitations also hinder volume-based analysis, it is difficult to assess how the analysis may be skewed as a result. As relevant, we pair our quantitative findings with observations from semi-structured conversations with several top plans, providers, and third-party intermediaries involved in the IDR process.
IDR Entities Varied Widely In How Often They Ruled In Favor Of Providers
Four IDR entities favored providers in more than 90 percent of cases resolved in the first half of 2024, while one IDR entity favored providers in only one-third of cases. For one IDR entity in one year, the share of disputes ruled in favor of providers was as high as 99 percent. Conversely, the lowest share across years and IDR entities was 19 percent, an 80 percentage-point difference. The full distribution of determinations by IDR entity are shown in Exhibit 1 below.
Exhibit 1. Share of Identified Single-Determination Disputes Decided in Favor of Providers by IDR Entity, 2022 – Q2 2024
Source: Author’s analysis of Federal IDR PUFs, Reporting Year 2022, 2023, and Q1-Q2 2024.
Note: Each IDR entity was assigned a number 1 to 13, as shown on the x-axis. Missing data for certain years indicates when the IDR entity did not have a unique payment amount and thus could not be individually identified. Graph only includes data from single determinations and does not include batched determinations.
Case Volume Varied Across Entities And Is Correlated To Outcomes
Volume also varied across IDR entities (Exhibit 2). For resolved single-determination cases estimated to be initiated in 2022, three IDR entities arbitrated nearly three-fourths of all disputes. The share of disputes is more evenly distributed among the IDR entities that could be identified in the first quarter of 2024, with six IDR entities each deciding 3 to 5 percent of cases initiated in that quarter and the two highest volume IDR entities deciding 7 percent and 9 percent of analyzed disputes.
Exhibit 2. Share of Identified Single-Determination Cases by IDR Entity, 2022 – Q2 2024
Source: Author’s analysis of Federal IDR PUFs, Reporting Year 2022, 2023, and Q1-Q2 2024.
Note: Each IDR entity was assigned a number 1 to 13, as shown on the x-axis. Missing data for certain years indicates when the IDR entity did not have a unique payment amount and thus could not be individually identified. Graph only includes data from single-determination cases and does not include batched determinations.
The share of cases appears correlated with determination outcomes: the IDR entities that rule in favor of providers tend to have higher case volumes. For example, the top IDR entity for resolved cases initiated in Q1-Q2 of 2024 decided more than 90 percent of cases in favor of providers. The lowest volume IDR entity had less than 1 percent of all disputes and determined only one-third in favor of providers. In our discussions with stakeholders, we heard that plans and providers may purposefully select or veto particular IDR entities, likely informed by internal data on decision trends. This veto strategy could explain how the IDR entities that most often ruled against providers ruled on so few cases. Overall decision-making patterns should ideally be similar across all IDR entities, so it will be important to understand why variations exist.
Lags In Days To Determination Have Declined; Average Times Varied By Entity
Differences are also apparent in IDR entities’ time to determination (Exhibit 3). In 2022, IDR entities decided single-determination cases within 131 days on average. Days to determination varied across the highest-volume IDR entities from 79 to 195 days. In 2024, while the overall average dropped to 54 days, the highest-volume IDR entities averaged 51 and 80 days. Only one IDR entity had an average (31 days) close to the statutory time to determination of 30 days. Volume does not appear correlated to time to determination, nor does it appear correlated to the IDR entities’ arbitration outcomes.
Exhibit 3. Average Days to Determination of Identified Single-Determination Cases by IDR Entity, 2022 – Q2 2024
Source: Author’s analysis of Federal IDR PUFs, Reporting Year 2022, 2023, and Q1-Q2 2024.
Note: Each IDR entity was assigned a number 1 to 13, as shown on the x-axis. Missing data for certain years indicates when the IDR entity did not have a unique payment amount and thus could not be individually identified. Graph only includes data from single determinations and does not include batched determinations.
Variability Across IDR Entities Underscores A Need For Greater Transparency
Our analysis indicates that IDR entities vary significantly in their decision-making practices despite expectations that decisions would be consistent across entities. Our stakeholder discussions suggest that parties may strategically veto particular IDR entities. Our analysis sheds some light on variations already known to provider and payer stakeholders engaging in IDR. More transparency in the PUFs would improve our understanding of the IDR process.
Similarly, the rationale behind payment determinations remains unclear due to limited transparency into how IDR entities evaluate submissions. While IDR entities must disclose certain information to CMS on each determination, such as the amounts of both parties’ offers and the final determination amount, they are not required by statute to disclose the rationale for their decisions (though the statute does allow the Secretary to require additional reporting). In our stakeholder discussions, both sides said that IDR entities’ reports on their determination decisions include minimal justification or rationale, limited to vague checkmarks and boilerplate language. Without public reporting, a standardized rubric, or an auditing mechanism, observers can only speculate on the basis for payment determinations. Stakeholders raised concerns about the credibility of submitted information, inconsistent sharing of case materials, and lack of transparency on how historical payments or rationales submitted by the parties brief may influence decisions. Greater transparency, either through legislative mandates or regulatory guidance, could address these concerns.
The pace of IDR entity decision making may also warrant greater oversight by CMS. As our analyses show, the rate of filed cases continues to accelerate rapidly. The volume of ineligible cases continues to be high as well, raising concerns that ineligible cases are contributing to system inefficiency. Given that IDR entities determine case eligibility and are only paid for eligible cases, some stakeholders suggest that IDR entities are incentivized to determine ineligible cases as eligible. The IDR system needs a more effective means of screening out ineligible claims, but IDR entities may not be ideally positioned for this task. Proposed rules that are pending at the federal agencies should help address delays in eligibility determinations, but would not resolve incentives for IDR entities to determine eligibility.
As the volume of cases entering the IDR process continues to climb, IDR entities’ processes and determinations will continue to be examined and scrutinized. Better education, training, and oversight of IDR entities and their decision-making might help reduce some of the uncertainties in the current process and boost confidence for both the contesting parties and the wider community interested in the impact on costs and premiums that the amounts paid are as fair as possible.
Kennah Watts and Jack Hoadley “No Surprises Act Arbitrators Vary Significantly In Their Decision Making Patterns” June 24, 2025, https://www-healthaffairs-org.proxy.library.georgetown.edu/content/forefront/no-surprises-act-arbitrators-vary-significantly-their-decision-making-patterns. Copyright © 2025 Health Affairs by Project HOPE – The People-to-People Health Foundation, Inc.
