If an out-of-network provider or facility wishes to dispute an insurer's payment, they must notify the insurer within 30 calendar days after the receipt of payment or payment notification from the insurer. This notification begins a 30-day informal negotiation period between the two parties. The insurer may not require the payment that was made to be rejected or returned by a provider or facility as a condition of putting the payment into dispute.
If informal negotiation does not yield agreement, either party may initiate arbitration to determine a commercially reasonable payment amount. To initiate arbitration, the petitioning entity must provide written notification to the Office of the Insurance Commissioner (OIC) and the non-initiating party within 10 days of the completion of the 30-day informal negotiation period. The notice must include the initiating party's final offer. Within 30 days, the non-initiating party must provide its final offer in response. The parties may reach an agreement on reimbursement during this time.
Multiple claims may be "bundled" for concurrent consideration in arbitration under the following circumstances:
- The claims occur within a two-month timeframe;
- The claims involve the same two parties (i.e. insurer and provider/facility); and
- The claims involve the same or related CPT codes relevant to a particular procedure.
An arbitrator is selected through a defined process, and within 30 days of selection, parties to arbitration must make written submissions to the arbitrator in support of their positions. If one party does not make a timely submission, they are in default and the arbitrator will rule for the participating party and may hold the default party responsible for arbitration costs. Within 30 days of receipt of the written submissions, the arbitrator must issue a written decision, selecting the final offer amount of one of the parties. Expenses incurred in the course of arbitration must be divided equally among the parties to the arbitration (not including attorneys' fees).
In making a determination, arbitrators must consider the following factors:
- The evidence submitted by the parties in support of their positions;
- "Patient characteristics and the circumstances and complexity of the case, including time and place of service and whether the service was delivered at a level I or level II trauma center or a rural facility that are not already reflected in the provider's billing code for the service."
- The data set compiled from the Washington all-payer claims database, including claims for median in-network amounts, median out-of-network allowed amounts, and median billed charges for the same or similar services in a geographic area. Once compiled, the data set is adjusted in subsequent years by applying the consumer price index-medical component from the U.S. Department of Labor, Bureau of Labor Statistics.
Both parties to the arbitration must sign a non-disclosure agreement. The NDA does not preclude the arbitrator from submitting the final decision to the OIC. The OIC compiles arbitration decisions into an annual report, detailing parties to arbitration and the type of health care service at issue.