What is out-of-network arbitration?
A plain-English guide for surgical practices — what it is, why it exists, how it works, and why most practices never use it. No jargon, no sales pitch.
The short version
When you treat a patient who's out-of-network, the insurer decides what to pay you — and it's often far below what the care was worth. Most practices accept that number because fighting it seems like more trouble than it's worth.
There's a federal process that exists precisely to challenge it. It's a form of arbitration, and when providers use it, they usually win.
Out-of-network arbitration is a formal process for resolving payment disputes between a provider and an insurer when they can't agree on what an out-of-network claim is worth. A neutral third party decides the number — and the data shows those decisions tend to favor providers.
Why it exists
In 2022, the federal No Surprises Act (NSA) took effect. Its main goal was to protect patients from surprise medical bills — the large, unexpected charges that come from being treated by an out-of-network provider. But the law had a second job: to settle the payment fight that creates fairly, without putting the patient in the middle.
To do that, it created Independent Dispute Resolution — IDR — a structured way for providers and insurers to resolve out-of-network payment disputes through a neutral arbitrator instead of a lawsuit.
How it works
The process is often called "baseball-style" arbitration, and the name is the easiest way to understand it.
Step one
The claim is underpaid
You bill for out-of-network care. The insurer pays its own benchmark rate — the Qualifying Payment Amount, or QPA — which is frequently a fraction of the claim.
Step two
Eligibility & negotiation
If the claim qualifies, there's a short open-negotiation window to try to settle. Many don't settle — which is what opens the door to arbitration.
Step three
Each side names a number
The provider submits the amount they should be paid. The insurer submits theirs. Both go to a neutral, certified arbitrator.
Step four
The arbitrator picks one
The arbitrator must choose one of the two numbers — no splitting the difference — usually within about 30 days. The losing side pays the arbitrator's fee.
Because the arbitrator has to pick a side rather than compromise, a well-prepared, well-documented submission wins more often. That preparation is the whole game.
OON — out-of-network. Care delivered without a contract with the patient's insurer.
NSA — the No Surprises Act, the 2022 federal law behind the process.
IDR — Independent Dispute Resolution, the arbitration step itself.
QPA — Qualifying Payment Amount, the insurer's benchmark rate. Arbitration awards routinely land several times higher.
Federal and state — two roads to recovery
The No Surprises Act is the federal process, but it isn't the only one. Around two dozen states have their own surprise-billing laws, and some run their own arbitration. Which road a claim travels depends on the patient's plan and the state.
That matters for Divitiae's footprint. New York operates a mandatory dispute-resolution process with a broader definition of a surprise bill — it covers an in-network doctor referring a patient to an out-of-network provider, not just emergencies. Florida has its own provider–health plan dispute program. Part of the work is simply knowing which process a given claim belongs in — federal or state — and routing it correctly. A claim that doesn't qualify federally may still be recoverable under state law, and vice versa.
Why it matters to your practice
This isn't a long-shot appeal. Across the federal process, providers win the large majority of disputes, and the median award comes in at more than three times the insurer's initial QPA benchmark. Since 2022, more than three million disputes have been filed — and the volume keeps climbing.
Here's the part most practices miss: an estimated nine in ten eligible out-of-network claims are never disputed at all. They're underpaid, accepted, and quietly written off — not because the money isn't recoverable, but because no one had the time, expertise, or stamina to pursue it.
For plastic surgery, orthopedics, and podiatry — specialties with high out-of-network volume and high-dollar claims — the recoverable amount per practice can be substantial. Whether a specific claim qualifies depends on the situation, which is the first thing any honest review determines.
Why most practices never use it
The process rewards three things a busy practice rarely has to spare: knowing which claims actually qualify, the patience to manage a months-long negotiation cycle, and the specialty knowledge to build a submission that wins. Miss any one and the claim stalls. That's why the practices recovering this money almost always have a specialist running it for them.
Common misconceptions
So — do you need it?
If your practice treats out-of-network patients and you've been accepting whatever the insurer pays, the honest answer is almost certainly yes. The only question is how much is recoverable — and that's something you can find out without spending anything.
That's what we do. We figure out which of your claims qualify, fight the insurer, and run the whole process so you don't have to. See how we work a case →