New No Surprises Act rules won't fix $51M crisis, TX group says
Radiology Associates of North Texas expects to pay millions to participate in the No Surprises Act's IDR process even as CMS tries to alleviate major pain points for providers.
Days before CMS announced sweeping reforms to the federal Independent Dispute Resolution process, Radiology Associates of North Texas issued a stark warning: the broken system could cost them $51 million in arbitration fees alone.
For Dave Walker, who leads the independent, Texas-based practice as chief revenue officer, the announcement represented both vindication and frustration.
CMS had finally acknowledged what independent physician groups had been criticizing for three years: The federal IDR process is financially unsustainable, particularly for specialties like radiology, where individual service charges are relatively small but volume is high. The agency's decision to slash its administrative fee from $115 to $15 per dispute was welcome news.
But it doesn't address the core dysfunction that had driven RANT to go public with its internal analysis of administrative costs related to the IDR process.
"The big positive I saw out of the new rules was the decrease in the CMS fee," Walker acknowledged in an interview. "I don't want to downplay that, and I applaud CMS for that. But the rest of the batching rules, at least from a radiology perspective, really have no impact."
The real problem, Walker argues, isn't the administrative fees. The issue boils down to a federal system that lacks an enforcement mechanism to compel payers to participate in the dispute resolution process that the No Surprises Act created.
No waking from the batching nightmare
The federal IDR batching framework operates under a patchwork of interim regulations, sub-regulatory guidance and varying interpretations by IDR entities, or IDREs. This is largely due to federal court rulings that struck down parts of the government's initial strict batching definitions.
However, three foundational statutory rules for a batch have remained intact: claims must be billed under the same National Provider Identifier or Tax Identification Number, be made by the same health plan or issuer, and include services furnished within the same 30-business-day period.
According to RANT, this framework forces providers to split similar claims into thousands of smaller arbitration filings, each with its own fees.
"When we batch claims together the way the federal batching rules work, our batch sizes are very small," Walker explained. "And oftentimes they don't even match the amount that's going to get charged by the IDRE."
On top of administrative fees, disputing parties must also pay the IDRE. The average administrative fee is $595 for a single determination and $695 for a batched determination with up to 25-line items, based on CMS data. IDREs then have a fixed tiered fee for larger batches.
In RANT's case, this often means that the average charges for the services in dispute are lower than the administrative fees under the federal process. This especially impacts a specialty like radiology, where patients undergo very few services per hospital visit, limiting the number of line items practices can batch.
"You're talking about $30 and $40 million extra cost above and beyond the charge and, frankly, well above and beyond what I've asked Blue Cross for by multiples," Walker stated.
CMS has sought to address the batching problem by capping batches at 50 qualified items or services, based on revised circumstances, including patient encounter, the same service code and whether the items and services are for certain specialties, such as radiology.
Payers have criticized the new rules, claiming they favor providers. However, Walker says the changes won't make much of a difference for RANT unless the batch sizes are larger or the time period is extended.
"It was a reasonable thing for [CMS] to do, but it does not fix the heart of the issue, which is if payers aren't forced to actually meaningfully participate in the process, they don't," he explained.
A rulebook with no referee
Blue Cross Blue Shield of Texas owes RANT more than $3.5 million in balances awarded under the federal IDR process. Of that, nearly $1.64 million has been unpaid for more than 120 days, according to RANT's internal analysis.
Without penalties for non-payment or refusal to negotiate, payers like Blue Cross Blue Shield of Texas can simply ignore the process, forcing providers into costly arbitration battles where the fees often exceed the disputed charges themselves, Walker argued.
But when RANT filed similar disputes under Texas's state-level IDR process -- which requires open negotiation and includes enforcement penalties -- Walker said Blue Cross Blue Shield of Texas settled within two weeks at the exact rate he had been requesting on the federal side and without the official arbitration process.
It all boils down to there being no teeth in the federal process that forces them to actually pay the awards and participate in the process.
Dave Walker, chief revenue officer, RANT
"They knew they would have to pay the awards. They knew they would have to participate in the process," Walker said of the state system. "So, within two weeks, no additional fees, we came to a reasonable rate."
However, the same disputes on the federal side resulted in years of silence, despite tens of thousands of claims filed and repeated attempts at communication.
"Why? It all boils down to there being no teeth in the federal process that forces them to actually pay the awards and participate in the process," Walker said.
That isn’t necessarily true for providers, though. The original No Surprises Act gave CMS the authority to fine providers $10,000 per violation and to award triple damages for inappropriate behavior.
Payers advocated for provider penalties during the legislative process. The final law included $10,000 fines for provider violations but did not include equivalent penalties for payers -- a gap that a new bill seeks to address.
The "No Surprises Act Enforcement Act" (H.R. 4710) was introduced to require payers and providers to pay awards within 30 days of a binding IDR determination, with a fine of up to $10,000 per failure over their heads.
However, the legislation remains up for debate by House committees, with some dragging their feet as they grapple with payers' claims that providers have abused the IDR process.
But the longer enforcement takes, the more employers -- and ultimately, patients -- will end up paying for the federal IDR process' misgivings, Walker insisted.
A contracting crisis behind the billing battle
This isn't just a billing dispute between one radiology group and one payer, though. It's a window into a widening gap between payers and providers that the No Surprises Act has failed to bridge.
Payers have worried that the federal IDR process would drive providers to stay out of networks to get higher payment rates -- rates that one analysis found were a median of 459% of the qualifying payment amount, or the median in-network contracted rate for a service within a region.
Payer industry groups have argued that the IDR process, intended as a last resort, has become a primary revenue strategy, with some providers weaponizing it by flooding the system with disputes. Blue Cross Blue Shield of Texas has even sued over this issue, alleging medical billing intermediary HaloMD submitted tens of thousands of ineligible claims and yielded tens of millions of dollars in improper rewards.
More recently, the payer called for a "more balanced IDR process" through modifications, such as an upfront eligibility fee and a process for challenging arbitration outcomes, to "better align incentives and stop bad actors from gaming the system."
In a comment on RANT's claims, a spokesperson from Blue Cross Blue Shield of Texas said the organization supports the intent of the No Surprises Act, which is to take "patients out of payment disputes, while preventing unnecessary administrative burdens that drive up costs for American businesses and families."
"We will continue to advocate for meaningful reforms that address the root causes of rising health care costs," they stated.
However, in some cases, the IDR is the only pathway to revenue collection for providers.
Walker explained that RANT has not been in-network with Blue Cross Blue Shield of Texas for three years, despite providing services to about a million of their beneficiaries each year. This has led the practice to use state and federal IDR processes to collect revenue for the services.
"Our goal is to be in a network," Walker explained. "We think that is the right thing; as a matter of fact, we think that all sides need to be reasonable and think about the future of healthcare together."
Using the IDR process has led to excessive fees for both payers and providers, which could trickle down to patients as overall healthcare costs increase. Researchers say these costs could affect network contract negotiations in the future and premium costs.
However, stagnant reimbursement rates that have failed to keep up with inflation have stalled many negotiations. The American Medical Association recently reported that Medicare physician payments have increased by just 10% from 2001 to 2026, while the cost of running a medical practice has risen by 63%.
This has left providers like RANT little choice but to remain out of a payer's network. But this decision also strains independent practices, which have fallen by the wayside in favor of hospital and corporate employment lately.
Hospitals, health systems and other larger provider organizations tend to have the ear of payers, considering their market power. And this means they are getting paid, and usually much more than what a practice like RANT gets, Walker insisted. That's a large reason why providers flock to the IDR process, he explained.
"We didn't take the decision to go out of network lightly," he concluded. "If they would agree to the cost-of-living increases, we would be back in network tomorrow."
Jacqueline LaPointe is an Executive Editor at Xtelligent Healthcare Media, covering revenue cycle management, healthcare payers, health policy, and health IT since 2016.
Dig Deeper on Healthcare payment policy and regulation
