Arbitration gets all the attention. But arbitration isn't a strategy; it's the last resort. The real leverage lives in everything that happens before a dispute reaches IDR.

Ask most organizations how they handle NSA disputes, and the answer comes back fast: "We file for IDR." Arbitration has become shorthand for the whole strategy. It's part of the process with rules, deadlines, and a scoreboard, so it's the part everyone fixates on.

That focus is understandable. It's also where a lot of value quietly leaks out.

Because by the time a claim is in front of an arbitrator, most of the decisions that determine the outcome have already been made. The offer was set. The position was framed. The relationship was either preserved or strained. Arbitration doesn't create leverage; it spends whatever leverage you built, or failed to build, beforehand.

Arbitration is a tool, not a plan

Vendors love to advertise their IDR win rate, and a strong one matters. But a win rate in isolation tells you very little. A vendor that pushes nearly everything to arbitration can post a respectable percentage and still cost a plan dearly, in fees, in time, and in provider goodwill, because every dispute that escalates is a dispute that wasn't resolved more efficiently somewhere upstream.

The better question isn't "How often do you win at IDR?" It's "How rarely do you need to go?" Those are very different measures of the same program, and they point in opposite directions.

The gap is everything that happens first

The negotiation gap is the space between when a claim is billed and when it reaches arbitration. It's where the real work lives: the data that supports a defensible number, the way an offer is positioned, the timing of the outreach, the read on what a particular provider actually wants. Get that work right and most disputes never need an arbitrator at all.

Our own numbers make the point. The overwhelming majority of claims that draw provider pushback are resolved well before IDR, through negotiated settlements and write-offs. Only a small fraction ever advance to arbitration. That isn't because we avoid hard cases. It's because the cases are worked, not just filed.

Where disputes resolve

• 93% of disputed claims resolved before reaching IDR (Independent Dispute Resolution)
• 7% advanced to IDR, the exception, not the default
• 80% favorable determination rate on the claims that do go

Notice how those last two numbers reinforce each other. The favorable rate at IDR is high because so few claims get there. When you only advance the disputes that genuinely warrant it, the ones you bring to arbitration are the ones you're positioned to win.

Why a "just file for IDR" strategy costs you

Defaulting to arbitration feels decisive. In practice it carries a tax that rarely shows up on a single claim but compounds across a book of business. Providers are winning 88% of the time. Arbitrators are awarding payments that average 450% of in-network rates. IDR administrative costs hit $844 million in the first half of 2025 alone. Every dollar paid above a defensible in-network equivalent is a dollar that erodes plan margin, inflates MLR, and ultimately flows back to premium pressure your members feel.

There's the direct cost, administrative fees and the staff hours every filing consumes. There's the time cost, as resolution stretches from days into months. And there's the relationship cost, which is the one most easily overlooked: providers remember how they were treated, and a counterparty that reflexively escalates trains the market to escalate right back. Every dispute you could have settled and didn't make the next one harder.

The takeaway

A high IDR win rate paired with a high IDR volume is a warning sign, not a selling point. Ask any vendor what share of disputes they resolve before arbitration; the answer reveals whether they negotiate or just file.

What negotiation-first requires

Leading with negotiation isn't softer than going straight to arbitration. It's harder. It takes people who can read a claim, make a judgment about which battles are worth fighting, and the experience of knowing what a defensible position looks like before anyone files anything.

That's the part technology can't shortcut. Software can flag a claim, surface the data, and move it through a workflow at speed, and it should. But the decision about how to position an offer, when to hold, and when to escalate comes down to experience. The negotiation gap is closed by people who have done this thousands of times, not by a faster queue.

That reframe changes how you evaluate a partner. A program built around arbitration optimizes the end of the process. A program built around negotiation optimizes the beginning, and the beginning is where outcomes are decided. The gap between those two approaches is exactly the gap between a vendor that processes disputes and a partner that resolves them.

Erika Fears

Sr. Director, Legal AMPS

Erika Fears serves as Sr. Director of Legal AMPS, bringing deep expertise in healthcare law and dispute resolution. Her focus is on developing strategic approaches that resolve disputes efficiently and favorably before they reach arbitration, protecting plan assets and preserving provider relationships.

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