The Federal Patient-Provider Dispute Resolution Process

The Federal Patient-Provider Dispute Resolution Process

March 1, 2023
The Federal Patient-Provider Dispute Resolution Process
Introduction
easy reading) at least three business days in the future, the
The No Surprises Act, part of the Consolidated
provider must give the individual (or the individual’s
Appropriations Act, 2021 (P.L. 116-260), established
authorized representative) an itemized estimate of the
various consumer protections, including the prohibition of
amounts they expect to charge for the scheduled care (and
balance billing consumers in certain situations where an
any related items and services reasonably expected to be
individual can be unknowingly, and potentially
furnished). In some instances, the good faith estimate may
unavoidably, seen by an out-of-network provider (e.g., out-
include expected charges from multiple providers.
of-network emergency services). Separately, it also required
all providers that schedule services to furnish good faith
The estimate is to be based on information known at the
estimates of expected medical costs whenever an individual
time the estimate was scheduled; an individual ultimately
schedules to receive medical care (e.g., a scheduled
can be billed more if complications or special
doctor’s appointment, a scheduled surgery) at least three
circumstances occur.
days in the future. Building off of the latter requirement, the
law also directed the Secretary of the Department of Health
Good faith estimates are to be provided either on paper or
and Human Services (HHS) to establish a patient-provider
electronically within designated time frames. When care is
dispute resolution (PPDR) process. Under this process as
scheduled at least three business days in advance, the
implemented by HHS, if an uninsured or self-pay individual
estimate must be provided to the individual no later than
receives a medical bill that is at least $400 more than the
one business day after scheduling. When care is scheduled
good faith estimate, an independent third party decides
at least 10 business days in advance, the estimate must be
whether the individual is to pay the billed amount, the
provided to the individual no later than 3 business days
estimated amount, or an amount in between.
after scheduling. (Individuals also may request a good faith
estimate, which must be provided to the individual no later
This In Focus provides an overview of the federal PPDR
than three business days after the request.) If there are
process. The federal PPDR process does not apply in states
changes in the scope of the estimate after the good faith
that have a similar PPDR process that meets specified
estimate is initially provided, the provider must give the
requirements. As of the date of publication, no states had
individual an updated good faith estimate at least one
such a process, so the PPDR process applies in all states.
business day before the medical care is to be furnished.
Eligibility
Bill Substantially in Excess of Good Faith Estimate
To be eligible to use the PPDR process, an individual who
Eligibility for the PPDR process is separately determined
received medical care must meet the following criteria:
for each provider on the good faith estimate. To be eligible,

the aggregate billed amount for all items and services from
Be uninsured or self-pay
a particular provider must be at least $400 more than the
 Have a bill estimate (i.e., a good faith estimate) from the aggregated, estimated amounts from that provider.
provider
 Have a bill dated within the last 120 calendar days
Good faith estimates can include amounts from multiple
 Have a bill from a provider that is at least $400 more
providers. As such, it is possible that an individual receives
than the provider’s good faith estimate
a good faith estimate with cost estimates for services from
multiple providers, but upon receiving the bill(s), the
Uninsured or Self-Pay
individual is eligible to initiate the PPDR process with
Uninsured refers to individuals who do not have any of the
respect to only one provider.
following forms of coverage: employer-sponsored
Initiation
coverage, non-group insurance, coverage under a federal
health care program (e.g., Medicare, Medicaid), or coverage
Qualified individuals (or their authorized representative)
through the Federal Employees Health Benefits (FEHB)
may initiate the PPDR process online or by mail or fax with
Program. Self-pay refers to individuals who have employer-
HHS, which administers the process.
sponsored coverage, non-group insurance, or FEHB
coverage but who are not seeking to submit a claim to their
To do so, the individual must submit specified pieces of
insurance for the medical care.
information with their initiation notice, including the
individual’s contact information, the provider’s contact
Good Faith Estimate
information, a copy of the bill, and a copy of the good faith
When an uninsured or self-pay individual schedules to
estimate. Upon receiving this information, HHS is to select
receive medical care from any provider or a facility
an independent, certified third-party (i.e., a Selected
(subsequently referred to simply as a provider to facilitate
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The Federal Patient-Provider Dispute Resolution Process
Dispute Resolution (SDR) entity) to oversee the dispute
The process for determining a final payment amount varies
resolution.
for items and services that appear on the good faith estimate
and items and services that do not appear on the good faith
At this time, the SDR entity is to determine whether it has a
estimate.
conflict of interest with the individual or provider. If a
conflict of interest exists, HHS is to select a new SDR
For items and services that appear on the good faith
entity. If the SDR entity finds no conflicts of interests with
estimate, if the billed charge for a particular item or service
the individual or provider, the SDR entity must make an
is equal to, or less than, the corresponding charge on the
initial determination of the dispute’s eligibility and the
good faith estimate, the SDR entity must determine that the
completeness of the initiation notice. If the SDR entity
cost of care for that item or service is the billed charge
determines that an initiation notice is incomplete and
amount.
additional information is required, the submitting individual
generally would have 21 calendar days to submit the
If the billed charge for a particular item or service is more
missing information.
than the corresponding amount on the good faith estimate,
then the SDR entity must determine whether the difference
Once an SDR entity is selected, the individual would be
reflects the cost of a medically necessary item or service
responsible for paying an administrative fee to the SDR
and the occurrence of unforeseen circumstances. If the SDR
entity, which is $25 for 2023. (This fee is to be remitted to
entity determines that it does not, the SDR entity must
HHS.)
determine that the cost of care for that item or service is the
good faith estimate amount. If the SDR entity determines
Patient-Provider Dispute Resolution
that it does, the SDR entity must determine that the cost of
Process
care for that item or service is the lesser of (1) the billed
The PPDR process begins if and when the SDR entity
charge amount or (2) the median payment amount paid by a
determines a dispute to be eligible, determines the initiation
plan for the same or similar item or service by a same or
notice contains the required information, and then
similar provider in the geographic area where the services
subsequently notifies the individual and the provider that
were provided (as determined by an independent database).
the dispute is eligible for the PPDR process. As part of the
However, if the median payment amount is less than the
notification, the SDR entity is to request that the provider
good faith estimate amount, then the good faith estimate
furnish a copy of the bill; a copy of the good faith estimate;
amount is to be used instead.
and, if available, documentation that demonstrates that the
difference between the two reflects the cost of a medically
For items and services that do not appear on the good faith
necessary item or service and is based on unforeseen
estimate, the SDR entity must also first determine whether
circumstances that could not have reasonably been
the relevant billed charge amount reflects the cost of a
anticipated by the provider when the good faith estimate
medically necessary item or service and the occurrence of
was provided. The provider must submit this information to
unforeseen circumstances. If the SDR entity determines that
the SDR entity within 10 business days.
it does not, the SDR entity must determine that the cost of
care for that item or service is $0. If the SDR entity
The individual and provider also have an opportunity to
determines that it does, the SDR entity must determine that
indicate whether or not a conflict of interest exists with the
the cost of care for that item or service is the lesser of (1)
SDR entity.
the billed charge amount or (2) the median payment amount
paid by a plan for the same or similar item or service by a
At any point prior to a determination, the provider and
same or similar provider in the geographic area where the
individual can settle the payment dispute through either an
services were provided (as determined by an independent
offer of financial assistance or an offer of a lower amount,
database).
or an agreement by the individual to pay the billed charges
in full. If this occurs, the provider is to notify the SDR
If the SDR entity determines that the total amount to be
entity of the agreement within three business days and is to
paid by the uninsured or self-pay individual is less than the
reduce the settlement amount by at least half of the $25
total billed charges, the individual is considered the
administrative fee ($12.50).
prevailing party. In those instances, the final determination
amount the individual would pay would be reduced by $25
Determination
(i.e., the amount of the administrative fee). The SDR
Not later than 30 business days after receiving the requested
entity’s decision is binding on both parties, unless there is
information from the provider, the SDR entity must make a
fraud or an intentional misrepresentation of facts or if the
determination on the amount the individual must pay for the
parties agree to a different payment amount. The provider
disputed medical care. More specifically, the SDR entity
may, for instance, choose to provide financial assistance or
must make a separate determination for each unique item
otherwise agree to an amount lower than the SDR entity’s
and/or service as to whether the provider demonstrated that
determination, or the individual may agree to pay the billed
the difference between the billed charge and good faith
charges in full.
estimate reflects the cost of a medically necessary item or
service and is based on unforeseen circumstances. In
In October 2021 interim final rules, HHS estimated that
making this determination, the SDR entity must review the
over 26,000 claims would result in patient-provider dispute
documentation submitted by the individual and provider.
resolution cases each year.
Ryan J. Rosso, Analyst in Health Care Financing
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The Federal Patient-Provider Dispute Resolution Process

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