Payors have not pursued affirmative NSA litigation, but that may change. Providers’ (and, in some cases, IDR arbitrators’) conduct in IDR could provide grounds for payor lawsuits. For example, some providers may not comply with NSA requirements in the IDR process, such as by failing to follow the required open negotiation process, pursuing IDR (and obtaining enforceable awards) against incorrect payors, and withholding relevant information about IDR decision factors from payors while providing it to IDR arbitrators in confidential briefing. Payors have also experienced negligent decision-making by IDR arbitrators, who are overwhelmed by the unanticipated volume of IDR disputes and leave payors little recourse when they issue incorrect payment decisions (for example, when the services are clearly not eligible for the IDR process). Further, as a counterpoint to the TMA decisions, payors could assert more fundamental challenges to the NSA framework on a statutory or regulatory level. In particular, the structure and administration of the IDR process have arguably deprived payors of due process rights, and providers’ overwhelming win rate (over 70% at last reporting) creates downstream economic burdens for the same patients the NSA intended to protect. Recently proposed revisions to the IDR rules may also be subject to constitutional challenges, though regulatory delays make the effective date of any revisions uncertain.

Regulatory enforcement risk should remain low in 2024. Regulators have already initiated the first round of NSA-required audits of payors’ QPA calculation, but continued QPA enforcement is paused until at least May 1, 2024, while the agencies appeal the TMA III decision and wrestle with rewriting QPA rules in light of the decision. Regulators may also take a light touch in enforcing IDR compliance given the pending revised rules. Still, payors should continue to consider regulatory enforcement as an additional risk, and aim for NSA compliance to reduce their exposure to both.