Managed Care Outlook 2025

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Read time: 3 minutes

Payors face many operational challenges in managing an independent dispute resolution (IDR) process, but there are steps they can take to make their processes more efficient and effective and give themselves better defenses if and when providers take legal action for a payor’s failure to timely pay an award.

Ineffective notice

According to CMS statistics for Q4 of 2023, payors defaulted in about 10% of all IDR arbitrations. For arbitrations involving air ambulance claims, the default rate is nearly 20%. We have found that a principal reason for these defaults is that providers often are not presenting proper notice of IDR initiation to the payors.

At least for now, federal regulation does not require providers to serve notice on a payor by any specific means. Instead, a provider may electronically serve notice to a payor by a method that it believes in good faith will be readily accessible to the payor. That gives the provider a lot of leeway to decide how to send notice. Providers often send notices to email addresses for payor employees with no role in the IDR process. If a notice fails to reach the right department, the payor defaults and the provider’s offer prevails in the arbitration. The problem is compounded when the payor fails to timely pay the IDR award within 30 days because the lack of effective notice left it without any record of the arbitration.

Payors may avoid this outcome by taking a few steps. First, they can include an email address for receipt of IDR notices on remittance communications with providers. Second, payors should include the email address on their websites in an appropriate location. Even if these measures do not guarantee proper notice, the communications may later provide a payor with a basis for a motion challenging a default award.

Key takeaways
  • Front-end process improvements can enhance outcomes, reduce delays and decrease risk of post-IDR litigation
  • Payors should ensure more effective notice of IDR initiations by including notice address on provider communications and provider-facing websites
  • Payors can employ strategies to avoid other issues that lead to payment delays and potential litigation
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