On September 30, 2021, the Departments of Health and Human Services (HHS), Labor, and the Treasury, alongside the Office of Personnel Management (OPM), issued a new Interim Final Rule (IFR) to implement components of the No Surprises Act (NSA). The IFR issued regulations about the Patient/Provider Dispute Resolution (PPDR) Process, the dispute resolution process between individual uninsured or self-pay patients and providers or facilities (hereafter collectively referred to as providers), administered by an independent Selected Dispute Resolution (SDR) entity.
As of January 1, 2022, the NSA requires all state-licensed or certified healthcare providers to give uninsured or self-pay patients Good Faith Estimates (GFE) for the cost of their health care. If the billed charges from one provider are more than $400 over the Good Faith Estimate, a self-pay patient may contact the provider to let them know the billed charges are higher than the GFE. The patient may ask the provider to update the bill to match the GFE, ask to negotiate the bill, or ask if there is financial assistance available. If this does not resolve the issue to the patient’s satisfaction, the patient may start a dispute resolution process with HHS.
A Patient who is billed for substantially more than the Good Faith Estimate may use the Patient/Provider Dispute Resolution (PPDR) Process to dispute the bill.
A self-pay or uninsured patient may be eligible to undergo the Patient-Provider Dispute Resolution (PPDR) process if the total billed charges from a specific provider exceed the total expected charges for that provider on the Good Faith Estimate by more than $400. The individual may start the PPDR process by submitting a request to HHS and paying a small administrative fee. The PPDR process is handled by a third-party company, a Selected Dispute Resolution (SDR) entity, certified by HHS. The SDR entity will compare the estimates for each item or service against the charges for each and evaluate credible information from the provider explaining the difference. The SDR entity will then decide if the estimated amount, the billed amount, or another amount between the estimated amount and billed amount, should be paid.
In 2022, items or services (hereafter referred to collectively as items) provided by a co-provider or co-facility, rather than the convening provider (the one the patient originally scheduled with, or requested a good faith estimate from), that do not appear on the GFE with expected charges, are not eligible for PPDR. In 2022, providers can put a range of expected costs for items to be provided by a co-provider on the GFE, but these items will not be eligible for the PPDR process because they are a range of costs rather than a single cost.
A patient can still ask a co-provider directly for a Good Faith Estimate prior to the service, and it must be provided. The items on a GFE from a co-provider are eligible for the PPDR process if the final billed amount is at least $400 more than the expected charges on the GFE.
Eligibility Criteria for PPDR
The PPDR process is set up for:
- People without health insurance
- People with health insurance who receive an item or service that isn’t covered by their plan or coverage
- People with health insurance who plan not to use their plan or coverage to pay for a portion of, or all of, the cost for the item or service
Individuals cannot use the PPDR process if they requested Good Faith Estimates with the intent to self-pay, but then changed their minds and submitted the claim to their plans or insurers.
As each Good Faith Estimate could potentially contain expected charges from multiple providers, eligibility for the PPDR process is determined separately for each specific provider listed on the GFE. For each provider, the total expected charges for each item should be added up. This total estimated amount is then compared with the total of all billed charges for the same provider to determine eligibility for PPDR.
The $400 threshold includes charges for new items, even if that care was not itemized in the Good Faith Estimate. This is because “total billed charges” mean the total billed charges for all furnished items, both primary items and those provided in conjunction with the primary items. If the dispute resolution process did not apply to all care, providers might omit items from the GFE to avoid the resolution process.
Starting the PPDR process
To initiate the patient/provider dispute resolution process, the self-pay individual must notify HHS, preferably through the online federal IDR portal, of the intent to begin this process within 120 calendar days of receiving the initial bill.
What the initiation notice must include
The patient must include in the initiation notice:
- Information sufficient to identify the items under dispute, including the date of service or date the item was provided
- A copy of the bill for the items under dispute
- A copy of the Good Faith Estimate for the items under dispute
- The patient’s contact information, (name, email address, phone number, and mailing address) and communication preference (email, paper mail, or phone)
- The contact information (name, email address, phone number and mailing address) of the provider or facility
- The state where the patient received the items in dispute
- a $25 administrative fee
The Selected Dispute Resolution (SDR) entity
The IFR sets forth certification requirements for federally (HHS) qualified Selected Dispute Resolution (SDR) entities. They must be organizations free of conflicts of interest, and with expertise in arbitration, health care claims, managed care, billing and coding, and health care law. Once the initiation notice has been received, HHS will select a certified SDR entity to conduct the payment determination to resolve the dispute.
The PPDR process
The selected SDR entity will notify the patient and provider that the initiation request has been received and is under review. The SDR entity will review the initiation notice to ensure that the items in dispute meet the eligibility criteria for the PPDR process and that the initiation notice contains all the required information.
Once the SDR entity has determined that an item is eligible for dispute resolution, the SDR entity must again notify both the patient and the provider. The notice must include information about the item in dispute, the date of the initiation notice, additional requirements for providers or facilities, and the availability of consumer assistance resources. The patient also has an opportunity to object if a conflict of interest exists with the assigned SDR entity.
The SDR entity will request that the provider provide certain information within 10 business days. Patients may also submit additional documentation through the federal IDR portal. The SDR entity will review the billed charges to see if the items were included on the Good Faith Estimate, as well as all documentation submitted by the patient, and by the provider.
Information from the provider or facility
The information requested by the SDR entity from the provider includes:
- A copy of the Good Faith Estimate from the provider for the items under dispute
- A copy of the billed charges from the provider for the items under dispute
- Documentation providing evidence to demonstrate that the difference between the billed amount and the expected charges in the Good Faith Estimate reflects the costs of a medically necessary item, and is based on unforeseen circumstances that could not have reasonably been anticipated by the provider when the Good Faith Estimate was provided
The SDR entity will have 30 business days after it receives the information from the provider to determine the amount the patient must pay: the expected charges in the Good Faith Estimate; the billed amount; or an amount in between the expected charges and the billed amount. This determination will be considered binding on all parties, except if there is evidence of fraud or misrepresentation.
However, the parties remain free to agree to a lower payment than the SDR entity’s determination, to billed charges in full, or a to different amount altogether. The parties can also agree on a payment amount after the process has been initiated, but before it has been resolved. To settle, the provider must notify the SDR entity through the federal IDR portal within 3 business days of the agreement. This settlement notification must include the settlement amount, the date of settlement, and documentation of the settlement agreement. The provider must also reduce the patient’s settlement amount by at least half of the administrative fee.
The IFR includes patient protections throughout this process. The provider cannot move or threaten to move the bill into collection or impose late fees while the process is pending. The provider also cannot take or threaten retributive action against patients for using this process. Patients can still proceed with the resolution process even if they make partial or full payment towards the billed charges. Payment, or entering into a payment plan, does not show an agreement to settle at that, or any other, amount.
How the SDR entity determines the payment amount
The SDR entity will determine how much must be paid based on credible information submitted by the provider. Information is deemed credible if, upon critical analysis, the information is worthy of belief and trustworthy. The SDR entity will make this assessment separately for each unique billed item or service.
In general, SDR entities must presume that the expected charges included in the patient’s Good Faith Estimate are the appropriate payment amount.
If the provider’s billed charges exceed its estimated charges, or if an item or service was not included in the Good Faith Estimate, the SDR entity will examine documentation submitted by the provider to determine whether there is credible evidence that the difference
- reflects the costs of a medically necessary item and
- is based on unforeseen circumstances that could not have reasonably been anticipated by the provider when the GFE was provided.
If either requirement is not met, the patient will not owe anything more than the Good Faith Estimate amount for that item. The patient owes $0 for any item that was not included in the Good Faith Estimate.
If both of these criteria are met, i.e., the provider provides credible information regarding the reason for the higher charges, the patient must pay the lesser of the billed or the qualifying payment amount (QPA, i.e., the median in-network amount a local plan or insurer would have paid, based on an independent database). If this amount is less than the expected charge on the GFE, then the patient must pay the expected charge.
After making a determination for each item billed by the provider, the SDR entity will add together the amounts to be paid for all items. The SDR entity will calculate the final payment and then notify the patient and the provider. In cases where the patient owes less than the total billed charges, the provider must reduce the amount owed by the $25 administrative fee.
Examples of determining the payment amount:
1. The billed charge is less than the GFE charge: the patient owes the billed charge
If the billed charge is equal to or less than the expected charge in the Good Faith Estimate, the patient owes the billed charge. The SDR entity would determine that the billed amount is not substantially in excess of the GFE and this case is not eligible for review via the PPDR process. Example 1: billed charge $500; expected charge on the Good Faith Estimate $975. The SDR entity would inform the patient that the case is ineligible for review via the PPDR process.
2. The billed charge is greater than the GFE charge: when the patient owes the GFE charge
For an item that was included on the Good Faith Estimate, if the billed charge is greater than the expected charge, the patient must pay only the (lower) expected charge from the GFE.
The SDR entity determines the provider has NOT provided credible information
- that the difference between the billed charge and the good faith estimate reflects the costs of a medically necessary item or service and
- is based on unforeseen circumstances that could not have reasonably been anticipated by the provider when the good faith estimate was provided. Example 2: billed charge $875; expected charge $450. The payment amount will be $450.
3. The billed charge is greater than the GFE charge: when the patient owes the lesser of the billed charge or QPA (median local charge)
If the SDR entity determines that the provider has furnished credible information that the difference between the billed charge and the Good Faith Estimate is justified, the SDR entity must select as the amount to be paid by the patient individual as the lesser of:
- the billed charge; or
- the QPA. In cases where the QPA is less than the expected charge on the GFE, the amount to be paid will equal the expected charge. When comparing the billed charge with the QPA, the SDR entity should account for any discounts offered by the provider. Example 3a: billed charge $900; expected charge $450; QPA $2,000. Patient pays $900. In example 3a, the SDR entity determines that the provider did provide credible information justifying the higher charge. The payment amount would be the billed charge ($900), because it is lower than the QPA. Example 3b: billed charge $900; expected charge $450; QPA $400. Patient pays $450. In Example 3b, the SDR entity determines that the provider did provide credible information justifying the higher charge. The payment amount would be the expected charge on the Good Faith Estimate ($450) because the QPA is lower than the expected charge from the GFE.
4. The billed charge does not appear on the GFE: when the patient owes nothing
For billed items not listed on the Good Faith Estimate, if the SDR entity determines the provider did not provide credible information justifying higher charges, then the SDR entity must determine that amount to be paid for the new item to be equal to $0. Example 4: billed charge $900; no expected charge. Patient pays $0.
5. The billed charge does not appear on the GFE: when the patient owes the lesser of the billed charge or QPA (median local charge)
If the SDR entity determines that a provider has furnished credible information that the billed charge for an item not listed on the Good Faith Estimate is justified, then the SDR entity must determine the charge to be paid by the patient for the new item as the lesser of:
- The billed charge; or
- the QPA. When comparing the billed charge with the QPA, the SDR entity should account for any discounts offered by the provider. Example 5a: billed charge $900; no expected charge; QPA $2,000. Patient pays $900. In example 5a, the SDR entity determines that the provider did provide credible information justifying the higher charge. The payment amount would be the billed charge ($900), because it is lower than the QPA. Example 5b: billed charge $900; no expected charge; QPA $400. Patient pays $400. In Example 5b, the SDR entity determines that the provider did provide credible information justifying the higher charge. The payment amount would be the QPA ($400) because the QPA is lower than the billed charge.