Insights

With over 275,000 disputes flooding the IDR system, healthcare providers are drowning in administrative intricacy. For many, a single missed deadline — as short as four days — can mean thousands in lost revenue. The No Surprises Act (NSA) promised fair payment dispute resolution between providers and payers while protecting patients from unexpected out-of-network bills. However, the Independent Dispute Resolution (IDR) process has instead created a maze of challenges for healthcare providers. From complicated administrative requirements to evolving regulations, many providers struggle to recover the reimbursement they deserve. Here’s why a managed IDR service could be the solution your practice needs. The Hidden Complexities of IDR Management Healthcare providers face multiple challenges when managing the federal IDR process independently. The administrative burden alone can overwhelm staff; which can include: Detailed Open Negotiation Notices (ONNs) Maintaining comprehensive documentation Meeting strict deadlines (miss a four-day filing window after the open negotiation period, and you could lose your right to dispute the claim entirely.) Beyond administrative tasks, providers must navigate intricate federal and state regulations that vary by payer, service type, and location. Determining whether a claim qualifies for federal or state IDR processes requires careful analysis of multiple factors, including payer type and service classification. Even claim batching must follow strict rules, such as matching CPT codes and narrow timeframes. Most providers lack the internal resources and expertise needed to manage these disputes effectively. Success in IDR requires sophisticated data analysis, drawing insights from geographic market data, historical billing data, and payer rate data such as the price transparency and IDR public use files. Without advanced analytics and legal expertise, providers often find themselves at a disadvantage when negotiating with powerful payers. The Four Key Challenges of IDR Management While the IDR process was designed to provide a fast and fair method of resolving payment disputes, it has introduced a host of complications that make it difficult for providers to manage effectively. Let’s examine the four key challenges that providers face:  1. Administrative Burden The IDR process demands a series of labor-intensive tasks that can quickly become unmanageable: Filing Open Negotiation Notices (ONNs): This critical step requires generating detailed emails with listings of all services provided, attached supporting documentation, and the correct payer address for the disputed claims. Even minor errors, like sending an ONN to the wrong payer subsidiary, can result in delays or dispute dismissal. Document Management: Providers must maintain comprehensive records of EOBs/ remittances, medical records, and payer correspondence. While these documents are essential for building strong arbitration cases, organizing and tracking them manually can be overwhelming. Timeline Compliance: The IDR process operates under strict deadlines. Missing the four-day window after the 30-day open negotiation period to submit an IDR dispute can lead to disqualification and significant revenue losses. 2. Complex Regulations and Compliance Healthcare providers must navigate intricate federal and state regulations that vary by multiple factors: Eligibility Determination: Each claim requires careful evaluation to determine whether it qualifies for federal or state IDR processes. This assessment considers factors like payer type (commercial vs. other), service classification (emergent vs. non-emergent), and whether self-funded employer plans have opted into state processes. Batching Rules: Claims can only be batched under strict conditions, requiring them to:  Have identical CPT codes or encounter codes Be serviced in the same 30-day window Be grouped under the same plan Regulatory Evolution: The NSA and IDR regulations continue to change, with updates like modifications to the Qualifying Payment Amount (QPA) weight and constantly changing batching rules significantly impacting arbitration outcomes. 3. Resource and Expertise Gaps Most providers face significant challenges in two critical areas: Data Analysis: Successful IDR outcomes depend on data-driven offer rates, requiring sophisticated analysis of: Historical billing data Public data files such as FAIR Health or the IDR public use files Geographic market statistics Without advanced analytics capabilities, providers risk submitting suboptimal offers. Legal Strategy: Effective arbitration requires payer-specific strategies and deep understanding of federal regulations. Providers without dedicated legal expertise often struggle to present compelling cases. 4. Market Volatility Preparedness The risk of being forced out-of-network due to payer contract terminations presents a significant challenge. Providers must be prepared to: Engage in the IDR process immediately after an out-of-network transition Maintain financial stability following terminated contracts Navigate sudden shifts in reimbursement patterns Leverage success in the IDR process in negotiations with payers for in-network contracts How Do Managed IDR Services Transform the Process? A managed IDR service addresses these challenges by providing comprehensive support and expertise: 1. Automated Efficiency Modern IDR services leverage automation to streamline time-consuming tasks. From generating ONNs to tracking critical deadlines and batching claims appropriately, automation reduces administrative burden while ensuring accuracy. This allows your staff to focus on what matters most: patient care. 2. Data-Driven Decision Making Success in IDR depends on making informed decisions. An IDR managed service can: Provide vast amounts of data analysis to determine optimal offer rates Select the most informed IDR entities  Build compelling evidence-based arguments This data-driven approach significantly improves success rates and maximizes reimbursement outcomes. 3. Expert Legal Strategy Combining data analysis with specialized legal knowledge, managed IDR services develop payer-specific strategies that address common tactics used by insurers. Legal expertise ensures all submissions comply with regulations while building strong cases for fair reimbursement. 4. Preparedness for Industry Volatility In today’s healthcare environment, providers must be prepared for contract disputes and potential out-of-network transitions. A managed IDR service helps establish readiness protocols, analyze historical data for revenue opportunities, and develop contingency plans to maintain financial stability during challenging periods. The Allia Group Advantage With over 14 years of experience in payer disputes, Allia Group offers a comprehensive managed IDR solution that stands out in several ways: Litigation-informed strategies that apply proven legal principles to the IDR process Advanced technology that automates eligibility determination, claim batching, and communication tracking Customizable solutions tailored to the unique needs of physician groups, hospitals, and EMS companies Proven results in achieving higher reimbursement rates and improved cash flow for healthcare organizations Making the Right Choice

For healthcare providers, even the most advanced revenue cycle management (RCM) is not enough in the face of significant challenges associated with bad payer behavior. Physician groups, hospitals, and EMS companies struggle with denied claims, underpayments, and difficult contract negotiations. These critical issues disrupt cash flow and weaken financial stability. A cohesive strategy that merges legal tactics with traditional revenue cycle management provides a comprehensive solution for overcoming these obstacles. By integrating legal models into RCM efforts, providers can unlock new opportunities for maximizing revenue, reducing administrative burdens, and ensuring fair compensation. Litigation Can Help Overcome Common RCM Challenges Addressing complicated RCM challenges demands solutions that go beyond traditional healthcare revenue management approaches. These include insurance denials and underpayments, which remain significant roadblocks for providers seeking fair compensation. Allia Group’s healthcare finance podcast, The Strain, recently featured Jennifer Brown, General Counsel at Progressive Emergency Physicians to discuss relevant issues. In her episode, Brown discussed the strategies she employed to ensure providers get paid fairly, including the critical role of legal expertise in navigating complex payer disputes and recovering underpaid revenue. Brown explained, “We are aggressively pursuing the dispute resolution process to procure fair payment. We’ve seen the same argument used over and over again. They’re trying to mitigate healthcare costs and the providers are charging too much, et cetera…So we actively pursued the federal IDR process for that limited out-of-network exposure for the rest of the group.” Additional legal tools for RCM companies like the No Surprises Act’s federal Independent Dispute Resolution (IDR) process or other forms of litigation can provide additional paths forward and complement RCM solutions. A comprehensive legal strategy can help providers fight for timely, accurate payments, ensuring claims aren’t stuck in limbo due to unsavory payer tactics. Litigation’s Role in Payor Contract Negotiations A strategy which utilizes litigation, IDR, and other legal means to adjudicate payor disputes offers a more holistic approach to revenue cycle management, and consistent use of IDR and litigation sets the table for improved posture in payor contract negotiations. This requires collaboration between thought-leading RCMs and innovators in litigation. Sophisticated providers have been successful bringing payers back into network contracts through the use of litigation and IDR. The resulting reimbursement values from legal disputes have been applied in complex payer contract negotiations. Jennifer highlighted the benefits of her effective IDR-driven approach to renegotiating payer contracts. Her success story demonstrates the impact of IDR and litigation. Legal approaches can use data from past contracts and payment trends to help providers secure fair reimbursement rates. “When I used the IDR process, over the past couple of years, we actually signed additional contracts. So as much as the No Surprises Act has created challenges… We have been able to sign network contracts at rates that we believe are fair and reasonable. For me, a lot of that I attribute to our success in the federal IDR process.” Brown’s experience sheds light on how the right legal model and data analysis can help extend the revenue cycle and reduce the workload for RCM teams. By utilizing legal dispute resolution managed services, providers can continue focusing on patient care without the distraction of litigation and IDR. These new approaches result in both increased revenue and overall reduced timelines. When Should RCMs Use Litigation for Capital Recovery? For healthcare providers, knowing when to escalate a payment dispute to legal action is crucial. Legal action becomes necessary when: Claims are repeatedly denied or underpaid Services are continuously downcoded Payers violate the terms of their contracts It is important to consider legal strategies as soon as any of these issues become apparent. This grants providers the opportunity to maximize their chances of recovering fair compensation and prevents long-term cash flow disruptions. Maximizing Financial Outcomes Through Combined Strategies A strategic combination of legal expertise and RCM solutions is key to maximizing financial outcomes for healthcare providers. Legal strategies can help: Improve providers’ revenue Help recover the value of services quickly and efficiently Allow for leverage in future payor contract negotiations. Extend the revenue cycle Providers who integrate legal models with their RCM teams can adopt a holistic approach to revenue recovery, overcoming payer challenges while securing the financial stability of their organization. By leveraging legal pathways like Allia Group’s novel litigation and IDR strategies alongside traditional revenue cycle efforts, providers can reclaim revenue that would otherwise be lost, ensuring that their services are compensated fully and fairly. Contact us now for a consultation to maximize capital recovery for your physician group, hospital, health system, or EMS company. Key Takeaways: Revenue Optimization and Efficiency Through Legal Models Overcome RCM Limitations: Advanced revenue cycle management (RCM) alone can be insufficient against denied claims, underpayments, downcoding, and bad payer behavior. Combining RCM with legal strategies unlocks new opportunities for revenue recovery. Strengthen Payor Contract Negotiations: Litigation and Independent Dispute Resolution (IDR) strategies can enhance providers’ ability to renegotiate contracts at fair and reasonable reimbursement rates. Extend the Revenue Cycle: Legal tools like IDR and litigation can complement traditional RCM efforts, recovering revenue from both recent and older claims while reducing administrative burdens. Data-Driven Legal Strategies: Providers can leverage historical data from past contracts and prior out-of-network payments to secure better reimbursement rates and resolve disputes more efficiently. When to Use Legal Action: Legal escalation is crucial for addressing persistent claim denials, complex disputes, downcodes, or underpayments when traditional methods are not working. Maximize Financial Stability: A combined approach using litigation, IDR, and RCM enhances cash flow, ensures fair compensation, and provides leverage for future negotiations. Allia Group provides healthcare providers the opportunity to reclaim revenue, improve cash flow, and focus on patient care. Contact us for a consultation to explore tailored solutions for your healthcare organization.

Both the federal Independent Dispute Resolution (IDR) process and litigation are powerful tools in healthcare revenue recovery. In many scenarios, the No Surprises Act (NSA) has exacerbated revenue cycle challenges such as delayed payments and adverse impacts on cash flow and financial stability. Understanding when to use IDR and litigation with personalized guidance from Allia Group can help providers make strategic decisions to maximize revenue recovery from underpaid insurance claims.* Utilizing the IDR Process and Litigation To Solve Healthcare Revenue Recovery Challenges While the NSA aims to protect patients from unexpected bills, it has also introduced complexities for providers seeking fair compensation for out-of-network (OON) services. Terminated contracts, delayed payments, and underpayments have led to significant revenue cycle disruptions, threatening the financial stability of many healthcare providers. These disruptions can have long-term impacts and force providers to explore new avenues for revenue recovery. IDR and litigation present viable options, but knowing when to use each is key to success. When to Use the IDR Process for Healthcare Revenue Recovery The IDR Process is most effective for resolving out-of-network disputes related to recent procedures and surgeries within the last 30 days from receiving the EOB. It offers a structured and relatively accelerated resolution process, ideal for singular procedures or multiple claims in this timeframe that can be batched together. IDR is available when federal or state laws explicitly define the process and types of claims which can use it. Where a state has legislated a state IDR process, it is usually available for disputes related to local state insurance plans versus most federally regulated plans. Federal IDR is available for both federal and state regulated plans, where the state does not have its own IDR process. Limitations of the IDR Process Time Constraints The IDR process operates under strict time limitations, leaving many existing provider claims ineligible. Federal IDR is only available for claims involving services rendered on or after January 1, 2022. The process begins only after a 30-day open negotiation period fails to resolve the payment dispute. Providers then have just four days after the negotiation period ends to initiate IDR, making the timeline tight and challenging for those who may need more time to gather necessary documentation or who manage high claim volumes. Batching Restrictions Batching claims within the IDR process is highly restricted, limiting its effectiveness. The claims must share the same CPT code and dates of service must be within a narrow 30-day window.  There is also a maximum number of 25 items allowed per batched dispute. These stringent batching requirements are particularly problematic for providers dealing with claims needing to all be against the same self-funded ERISA plan and the issue of batching “similar” CPT codes. This reduces the efficiency and financial viability of pursuing IDR for batched cases. Insurer Advantage and the Qualifying Payment Amount (QPA) The IDR process has been significantly influenced by powerful insurance lobbies, often skewing the outcomes in favor of insurers. Since the implementation of the NSA, the use of the Qualifying Payment Amount (QPA) has been a contentious point, as the QPA tended to favor insurers by anchoring payment decisions closer to their interests. Although recent legal challenges have led to rule updates involving the QPA, progress is slow and systemic biases remain. Administrative Complexity and Financial Burden Engaging in the IDR process requires thorough preparation, documentation, and procedural compliance. This adds administrative complexity, strains resources, and diverts focus from healthcare delivery. Providers must also pay upfront fees for the administrative costs of initiating the process and the fees of the IDR entity that ultimately decides the appropriate payment amount. The prevailing party in IDR recovers the IDR entity fee. However, if the provider does not prevail in the IDR decision, they are responsible for covering the entire IDR entity fee, compounding the financial risk and burden associated with the IDR process. Allia Group can finance these upfront fees for providers to remove this burden. When to Use Litigation for Healthcare Revenue Recovery Litigation can serve as a robust alternative when IDR constraints impede fair recovery. It is suitable when providers cannot reach an agreement with insurers for OON reimbursements, whether or not such services are covered under the NSA or a state statute. Litigation can also be utilized for in-network disputes when providers face underpayments, downcoded claims, or contractual breaches—subject to the dispute resolution provisions within a provider’s contract. Litigation is particularly advantageous for pursuing older claims and those beyond IDR’s scope, allowing for potential recoveries across multiple years based on each state’s statutes of limitation. With Allia Group’s combination of legal expertise and advanced data analytics, providers can identify the most favorable recovery strategies, ensuring that all potential avenues for adjudicating reimbursement disputes are thoroughly explored and optimized. How Litigation and Litigation Finance Solve IDR Limitations Broader Claim Scope Litigation allows healthcare providers to pursue a broader range of claims, including in many instances those that fall outside the narrow timeframes of IDR. Providers can often include underpaid insurance claims from before the implementation of the NSA in the same lawsuit as those post-NSA, potentially enabling larger recoveries across multiple years. This strategy extends the conventional revenue cycle timeline and recaptures insurance balances by approximately up to six years, depending on the state’s statute of limitations. Flexible Bundling Litigation allows a provider to aggregate many smaller underpayment claims into a single, large-scale lawsuit against payers, maximizing opportunities for recovery. Allia Group’s litigation finance strategy has the ability to aggregate claims from multiple providers into one case, allowing for larger cases and more efficient use of legal resources. Financial Relief from Upfront Costs Allia Group’s litigation model helps alleviate financial pressure on providers by purchasing underpaid insurance claims and covering associated litigation costs. This approach shifts the financial burden away from providers, ensuring they can continue focusing resources on delivering quality healthcare services without financial strain associated with litigation. Reduced Administrative Burden Allia Group also reduces the administrative burden on providers of having to manage the long