Amendments to New York Independent Dispute Resolution Process for Health Care Plans

Key Takeaways

• The New York Department of Financial Services has issued guidance regarding legislative amendments that modify the Independent Dispute Resolution (IDR) process.
• These changes introduce new criteria for disputes involving State Plans and exclude Medicaid Managed Care from the IDR process.

Deep Dive

This regulatory update, stemming from the enactment of Part BB of Chapter 5CO of the Laws of 2026, significantly alters the landscape for insurers and providers operating in New York. Compliance teams must recognize that Medicaid Managed Care coverage is now officially excluded from the IDR process for disputes filed on or after May 28, 2026. This necessitates a review of dispute filing workflows to ensure that incorrect filings are identified and communicated to IDR entities immediately.

For disputes involving State Plans (such as the Empire Plan), the amendment introduces a new "allowed benchmark" standard. IDR entities must now select either the issuer's payment or the provider's fee based on which is closest to the 50th percentile of allowed amounts in a specific benchmarking database. Compliance professionals should note that while this provides a mathematical baseline, IDR entities retain discretion based on provider experience, case complexity, and patient characteristics. Furthermore, certain factors, such as gross disparities in usual charges or "usual and customary" costs for physician services, are now prohibited from influencing the decision-making process.

The effective date for most of these amendments is August 26, 2026, applying to all disputes submitted on or after that date. Compliance teams must also prepare for new operational requirements regarding IDR entities, including the mandate that they hold dispute resolution payments in separate accounts and issue refunds to prevailing parties within 30 days of a determination.

To mitigate operational and financial risk, compliance professionals should update their internal dispute management protocols and training materials. It is critical to ensure that all relevant information is submitted to IDR entities at the time of application to prevent delays or unfavorable determinations. Additionally, issuers must implement controls to monitor the accuracy of dispute filings, particularly regarding the exclusion of Medicaid Managed Care, to avoid unnecessary administrative costs and legal friction.

Source: New York Department of Financial Services