The number of Independent Dispute Resolution cases between health care insurance plans and out-of-network providers has unexpectedly exploded since the process was established under the federal No Suprises Act in 2020, causing health plans to go on the offensive against out-of-network providers, who are winning more than 80 percent of the cases.
The providers are forced to play defense to mitigate the tactics used against them. As we recently discussed in our webinar, Independent Dispute Resolution (IDR) Key Updates, Trends and Outlook for 2026, there are specific options that place providers in the best position to prevail in these cases and obtain payment. This legal alert will explain those options.
Large Volume of IDR Cases Unexpected, Creating Backlogs
For background, Independent Dispute Resolution (IDR) is a federal dispute resolution process under the No Surprises Act used to settle payment disputes between health plans and out-of-network providers for emergency or other facility-based services. When a provider is not participating in a particular health plan, but a facility is, IDR is a process to settle payment disputes between the provider and the health plan. This is a way to resolve out-of-network payment rate disputes for emergency services, non-emergency services at in-network facilities, and air ambulance services.
Here is how the IDR process works: if the parties cannot informally resolve their dispute during a 30-day open negotiation period, either party can initiate the IDR process via the Federal IDR portal. A certified independent dispute resolution entity is selected, receives offers from each of the parties, and then chooses one of the two offers. It is important to note, this is a “baseball-style” arbitration, meaning one or the other offer must be chosen – not a third option that falls somewhere in the middle of the two. Once the decision has been made, it is binding and must be paid within 30 days, unless there is evidence of provider fraud or misrepresentation.
The No Surprises Act IDRs took effect Jan. 1, 2022. Importantly, some states have similar laws, including New York. This puts providers in a position to seek resolution either at the federal or state level, with rules dictating which option to pursue.
Since the No Surprises Act took effect, the volume of IDR initiations has far surpassed anticipated levels, causing delays in processing. More than 3.3 million IDRs were filed in the federal 2024 fiscal year alone. Providers have initiated most cases (over 85 percent) and won the majority of decisions (82 percent), with a median win amount of roughly 450 percent of the Qualified Payment Amount (QPA). In the Northeast, the most common initiations are by out-of-network physicians providing non-emergency services at in-network facilities (hospitals and ambulatory surgery centers).
The general sense when the law passed was that most of the out-of-network providers would ask their patients to opt out of the IDR process through a “notice and consent” process. The IDR process does not apply in certain non-emergency circumstances if a provider obtains valid notice and consent from a patient to waive surprise billing protections. In such cases, the out-of-network provider can balance bill the patient, and the federal dispute resolution process is not triggered.
But out-of-network providers generally are not taking the notice and consent pathway. This is likely due to out-of-network providers winning 80 percent of IDR initiations. This is far more than health insurance plans and the U.S. Centers for Medicare and Medicaid Services expected, causing delays because there are not enough independent arbitrators to handle the large volume of initiations.
Health Plans Focus on Reducing Cases
Health plans are very concerned about this IDR process. It is used far more than they expected, they lose far more than expected and they pay far more than expected. But it is important to know that, nationwide, only a tenth of a percent of their total spend comes in additional reimbursement brought about by IDRs.
Nevertheless, the plans have mounted several offenses in response:
- Halo-type lawsuits: These are lawsuits against entities, including HaloMD, submitting many IDR initiations, with a claim that so many initiations is a sign of wholesale fraud and flooding the system with false proceedings. This tactic has not yet been successful, with three such lawsuits being dismissed.
- Publicity about “outrageous” awards: Seeking to influence public opinion, the plans are publicizing large awards as an example of a failed system.
- Pressure on in-network facilities: Anthem has rolled out a policy in some states – coming to New York in July – where it financially penalizes in-network facilities for allowing out-of-network physicians to use the institution and then submit IDRs for non-emergency cases. Anthem is threatening a penalty of 7.5 percent to 10 percent of the additional IDR determination. More importantly, the plan will consider compliance with this policy when renewing in-network contracts. There has already been a lawsuit challenging the Anthem IDR policy in California.
- Requests for reopenings: When a health plan loses an IDR proceeding, it can request the case be reopened if it believes certain clerical, jurisdictional or procedural errors were committed. The Centers for Medicare and Medicaid Services has issued a Technical Assistance Memo outlining this process. Health plans are now flooding the system with pro forma requests for reopenings for cases they lose. They have created a standard form letter that is automatically submitted after a loss. The provider might not even know the request was filed. This accomplishes two things: it grinds the system to a halt and the plan then withholds payment for more than 30 days, even though the law requires payment within 30 days.
Tips for Providers to Combat Health Plan Tactics
Providers do have effective strategies to counter these actions by the plans. Here are just a few:
Halo-style lawsuits. Avoid the common allegations made in these lawsuits.
- The IDR offer should never exceed billed charges.
- Avoid simultaneously filing under both federal and state processes.
- Keep a regular workflow on filings; don’t flood the system on certain days.
- Always immediately respond to eligibility objections. Don’t make the mistake of ignoring an objection.
Publicity of high findings. Ensure the offer you submit in an IDR case is fair.
- Review your rates against benchmark services. Make sure your offer is in line.
- Educate the patient and the public about the true costs of services. Medicare rates are not market rates. Health plans love to say the offer is so much higher than Medicare. The response to that is the Medicare rate is designed to be a lower rate for the federal government to pay.
- Always point out that the IDR process is a “baseball-style” arbitration that forces the independent reviewer to choose between the plan’s offer and the provider’s offer. If the reviewer chooses the provider’s offer, that means it was considered the fairer offer.
Pressure to facilities. Report pressure from plans to attorneys.
- Send complaint letters to the proper authorities.
- Gather evidence to support a complaint or lawsuit.
- If all else fails, file a lawsuit.
Requests for reopenings. Several arguments can be made to suppress reopenings.
- Argue the Technical Assistance Memo exceeds the authority of the No Surprises Act.
- Even so, the Technical Assistance Memo still stipulates plans must pay within 30 days – why are health plans viewing this as a pathway to withholding payment?
- Most of these requests seeking reopening concern issues already adjudicated and lost. Any ground raised is usually something that was already raised or should have been raised.
More Tips for Providers
Eligibility: It is important for providers to understand state and federal eligibility for the IDR process. In New York, for fully insured plans, the state’s surprise billing law and IDR process typically apply to emergency services. But, if a case is non-emergency and the patient knowingly and voluntarily consents to out-of-network care (waiving their protections), the case does not qualify as a surprise bill under New York law and would be handled through the federal process.
Negotiation period: Remember to document everything during the 30-day negotiation period. If you cannot prove you went through this, your request for an IDR will be denied. Ensure you are using the proper contact information for the insurance plan so officials with the plan cannot say they did not receive your request.
Payment issues: The idea of allowing individuals or organizations, rather than just government agencies, to file civil lawsuits to enforce IDR decisions is currently being argued in the United States Court of Appeals for the Second Circuit in New York. But a recent decision in the United States District Court for the District of Connecticut, Agag v. Cigna Health and Life Insurance Company, reduces IDR awards to judgment, allowing for private collection. Also, it is important to note, when fighting for payment, there is a strong argument that the parties signing on to an IDR session have reached a contractual agreement that is enforceable.
Harris Beach Murtha’s Health Care Industry Team is regularly involved in Independent Dispute Resolution cases. If you need help, please reach out to attorney Roy W. Breitenbach at (516) 880-8378 and rbreitenbach@harrisbeachmurtha.com; attorney Peter M. Hoffman at (516) 880-8112 and phoffman@harrisbeachmurtha.com; or the Harris Beach Murtha attorney with whom you most frequently work.
This alert is not a substitute for advice of counsel on specific legal issues.
Harris Beach Murtha’s lawyers and consultants practice from offices throughout Connecticut in Bantam, Hartford, New Haven and Stamford; New York State in Albany, Binghamton, Buffalo, Ithaca, New York City, Niagara Falls, Rochester, Saratoga Springs, Syracuse, Long Island and White Plains; as well as in Boston, Massachusetts, and Newark, New Jersey.