Lorem ipsum dolor sit amet, consectetur adipiscing elit. Vivamus convallis sem tellus, vitae egestas felis vestibule ut.

Error message details.

Reuse Permissions

Request permission to republish or redistribute SHRM content and materials.

New Rule Initiates Health Care 'Surprise Billing' Arbitration

A federally mandated dispute resolution process takes effect in 2022

A woman sitting on a couch with a laptop and papers.

A new interim final rule issued by the federal government explains how an independent dispute resolution (IDR) process for patients and health care providers will work to resolve disputes over unscheduled "surprise" out-of-network health care charges.

The rule, to be published in the Federal Register on Oct. 7, implements provisions of the No Surprises Act (NSA), signed into law at the end of last year. Issued by the U.S. departments of Health and Human Services (HHS), Labor, and the Treasury, along with the Office of Personnel Management (OPM), it is a follow-up to an initial final interim rule issued in July, which detailed a ban on high out-of-network cost-sharing for many emergency and nonemergency services when a patient has not consented to the charges beforehand.

"Price transparency is a reality in almost every aspect of our lives except health care," said Centers for Medicare & Medicaid Services Administrator Chiquita Brooks-LaSure. These regulations, she said, will help to ensure that health care providers and facilities "provide uninsured patients with clear, understandable estimates of the charges they can expect for their scheduled health care services."

The new rule, which requests comments, was accompanied by two fact sheets, fee guidance for 2022 and accompanying materials. The agencies also launched a new website to educate the public on surprise billing limits and to host an IDR portal for payers and providers.

The Arbitration Process

The interim final rule applies to insurers or to self-insured employers and their third-party administrators disputing charges billed by out-of-network health care providers. These disputes typically arise after the out-of-network provider bills a patient for the difference between the charge and the amount paid by their plan, known as "balance billing."

In brief, here is how the process will work:

  • Before initiating the federal IDR process, the disputing parties must initiate a 30-day "open negotiation" period to determine a payment rate.
  • If negotiations fail during this period, either party may initiate the federal IDR process, and the parties may jointly select a certified IDR arbitrator to resolve the dispute.
  • The parties will submit their offers for payment along with supporting documentation.
  • The arbitrator will then issue a binding determination, selecting one of the parties' offers as the out-of-network payment amount.
  • Both parties must pay an administrative fee ($50 each for 2022), and the nonprevailing party is responsible for the arbitrator's fee.

Standard Notices

"Each step in this process requires the parties to provide written notice to the other party or the federal government," wrote Katie Keith, a former research professor at Georgetown University's Center on Health Insurance Reforms and a contributor to the Health Affairs blog. "To aid the parties in doing so, the agencies created various standard notices," she explained. "If a provider wants to initiate the open negotiation period, they must inform the plan or insurer and send written notice within 30 business days of an initial payment or denial of payment."

The open negotiation period then extends for 30 business days from the date of the notice, Keith explained, and "the parties must exhaust this open negotiation period before initiating the federal IDR process."

In addition, "the agencies urge good-faith negotiation during this period by encouraging the parties to reach an agreement before proceeding to the federal IDR process and incurring administrative costs," Keith noted. "The agencies expect 25 percent of disputes to be resolved during the open negotiation period."

Fierce Healthcare, an industry news website, reported that "some parts of the rule are sure to upset the hospital industry that had asked for more leeway on certain time frames."

For example, reporter Robert King noted, "the Federation of American Hospitals (FAH) wrote to the Biden administration back in August seeking greater flexibility on the timelines for triggering the independent resolution process. The No Surprises Act states that providers and payers have three days to choose a resolution entity and four days to trigger the dispute resolution process. FAH believes that HHS has the ability to change those timelines to make them more flexible," and will advocate that the agency does so.

Effective Dates and Comment Deadline

The IDR process takes effect for group health plans beginning in 2022, although parts of the rule related to IDR certification for arbitrators will apply immediately, allowing the agencies to start accepting applications from prospective IDR arbitrators.

The agencies are accepting comments on the interim final rule through Dec. 6, 2021. Written comments may be submitted electronically at

According to Keith, an additional new rule is scheduled to be issued later this year to implement the NSA's reporting requirements on pharmacy and prescription drug costs.

Proposed Rule Requires Plans to Report Air Ambulance Claims Costs

Proposed regulations under the No Surprises Act, published in the Federal Register on Sept. 16, will require employer-sponsored health plans to report data on the cost of air ambulance claims incurred and expenses paid in calendar years 2022 and 2023.

Employers may submit comments to the regulators through Oct. 18, 2021, on the proposed rule, Requirements Related to Air Ambulance Services, Agent and Broker Disclosures, and Provider Enforcement.

The proposed regulations implement Section 723 of the Employee Retirement Income Security Act (ERISA), added by the No Surprises Act. 

According to Hillary M. Sizer and Timothy J. Stanton, attorneys in the Chicago office of Ogletree Deakins, "ERISA Section 723 will require group health plans and air ambulance providers to report certain air ambulance service and claim information within the 90-day period after Dec. 31 for each required reporting year, beginning with 2022. The act then directs HHS, in conjunction with the U.S. Department of Transportation, to develop a comprehensive report on air ambulance billing based on the information submitted to the agencies."

Employers must submit reports for the 2022 calendar year to HHS by March 31, 2023, and calendar year 2023 reports will be due by March 30, 2024.


​An organization run by AI is not a futuristic concept. Such technology is already a part of many workplaces and will continue to shape the labor market and HR. Here's how employers and employees can successfully manage generative AI and other AI-powered systems.