Health Affairs Article IDR 'Cost' Claim Inflated Due to Reliance on Flawed QPA Benchmark

The American College of Emergency Physicians (ACEP), the American College of Radiology ® (ACR®) and the American Society of Anesthesiologists (ASA) today challenge a Health Affairs Forefront report claiming that the No Surprises Act's (NSA) Independent Dispute Resolution (IDR) process has generated $22.4 billion in costs. The national medical associations point out that the report's cost claim is built on a deeply flawed premise: that the insurer-calculated Qualifying Payment Amount (QPA) is accurate and represents an appropriate in-network payment rate. The evidence is overwhelmingly clear that QPAs are often inaccurate and unreasonably low. QPA calculations are opaque and independently unverifiable by physicians.

The paper counts $15.6 billion in IDR awards above the QPA as a cost attributable to the IDR, nearly 70% of the authors' total estimate. Errors in the Public Use Files (PUF) files have been publicly acknowledged but are not fully reflected in the Health Affairs analysis. It is estimated that at least $6 billion in the PUF may be either clerical errors or already accounted for before the IDR process.

"The paper posits that appropriate payments to front-line physicians for patient care translate into higher premiums. This framing overlooks the reality of big insurance: many of the nation's largest commercial health insurers and their parent companies report annual profits in the billions of dollars," said ASA President Patrick Giam, M.D., FASA. "If insurers choose to pass the cost of reasonable physician payments on to consumers rather than absorb those costs within their substantial revenue and profits, that is an unfortunate, profit-driven, business decision, not an inevitable consequence of the IDR process."

"The data continue to show that the IDR process is being used because insurers increasingly refuse to negotiate fair rates, offer inadequate reimbursement, and narrow physician networks," said ACR CEO Dana H. Smetherman, M.D., MPH, MBA, FACR. "When arbitrators consistently reject insurer payment offers and courts find flaws in how QPAs are calculated, policymakers should ask whether the median in-network rate calculations themselves are distorted; a fair and effective IDR process depends on accurate payment data, transparency, and accountability from all stakeholders."

A recent federal court decision offers further proof that QPAs can be distorted by unreasonable, artificially low rates. On August 11, the U.S. Court of Appeals for the Fifth Circuit ruled that federal QPA regulations improperly permitted insurers to include non-negotiated "ghost rates" and exclude certain bonus or incentive payments from QPA calculations. The court concluded that these practices resulted in artificially low QPAs.

The same ruling pointed to physicians' high IDR win rates and the frequency with which arbitrators selected payments above the QPA as evidence of artificially low QPAs, not proof that physicians were gaming the system.

ACEP, ACR and ASA agree policymakers should examine unusually large IDR awards and ensure the process operates efficiently. But policymakers should also examine inaccurate QPAs, inadequate initial payments, extremely low insurer offers, insurer defaults, and failures to pay IDR awards in a timely manner.

"The NSA and the IDR process must ensure that physicians who provide care to patients can receive fair and reasonable in-network payments after that care has been delivered," said ACEP President L. Anthony Cirillo, M.D., FACEP. "Congress and the Administration should ensure QPAs are accurate, require insurers to participate in the IDR process and negotiate with physicians in good faith. It is essential to preserve a fair IDR process that holds both insurers and physicians accountable."

The American Society of Anesthesiologists
Founded in 1905, the American Society of Anesthesiologists (ASA) is an educational, research and scientific society with more than 60,000 members organized to advance the medical practice of anesthesiology and secure its future. ASA is committed to ensuring anesthesiologists evaluate and supervise the medical care of all patients before, during, and after surgery. ASA members also lead the care of critically ill patients in intensive care units, as well as treat pain in both acute and chronic settings.

For more information on the field of anesthesiology, visit the American Society of Anesthesiologists online at asahq.org. To learn more about how anesthesiologists help ensure patient safety, visit asahq.org/madeforthismoment. Follow ASA on Facebook, X, Instagram, Bluesky, and LinkedIn.

The American College of Emergency Physicians (ACEP) is the national medical society representing emergency medicine. Through continuing education, research, public education, and advocacy, ACEP advances emergency care on behalf of its 40,000 emergency physician members, and the more than 150 million people they treat on an annual basis. For more information, visit www.acep.org and www.emergencyphysicians.org.

The American College of Radiology
The American College of Radiology (ACR) is a professional association representing more than 40,000 physicians practicing diagnostic radiology, interventional radiology, radiation oncology, and nuclear medicine, as well as medical physicists. Founded in 1923, ACR is the voice of our members, empowering them to serve patients and society by advancing the practice and science of radiological care. www.acr.org.