Eliott Dear on DFS Enforcement: Why New York Insurers Pay IDR Awards

Every conversation about IDR collection eventually circles back to the same question. Why do insurers pay state IDR awards but ignore federal ones? Eliott Dear answers this question for healthcare providers roughly once a week, and the answer is the same every time. Three letters. DFS.

What DFS Actually Does

The New York Department of Financial Services regulates insurance in the State of New York. That phrase gets repeated often and almost always stripped of its meaning. “Regulates” is not a polite word in this context. DFS issues and revokes the operating licenses of insurance carriers doing business in New York. Without a DFS-issued license, an insurer cannot sell a single policy to a New York resident, process a single New York claim, or collect a single New York premium.

That is not a theoretical power. DFS has used it before. Every major insurance carrier that wants to operate in New York has an entire compliance operation dedicated to keeping DFS happy. When DFS speaks, they listen. When DFS tells them to pay an IDR award, they pay it. The math is existential: pay the award or lose the ability to do business with 20 million New Yorkers.

The 30-Day Clock

Under New York’s surprise billing framework, an insurer that loses a state IDR determination has 30 days to pay the awarded amount. Not 30 days to review. Not 30 days to file an appeal. Not 30 days to negotiate. Thirty days to wire the money. The 30-day clock is not a suggestion. It is a regulatory obligation, and DFS tracks compliance.

When Eliott Dear files a state IDR determination request, he files it knowing that winning the dispute converts directly into a 30-day payment window. There is no further litigation. No enforcement action to file. No court petition to seek. The award is the payment trigger.

Compare to CMS

Federal IDR is administered by CMS. CMS does not regulate insurance carriers the way a state insurance department does. CMS does not issue or revoke operating licenses. The federal enforcement mechanism for an unpaid IDR award is a complaint form. That complaint form is processed at a rate that has been publicly reported as approximately 1.3%.

Eliott Dear does not file federal IDR disputes, and the reason is captured in that single number. A one-in-seventy-five chance of enforcement is not an enforcement mechanism. It is an accounting item for the insurer that reads “no penalty.” Any economically rational carrier looking at that number ignores the award and pockets the difference.

The Other State Regulators

New York is not the only jurisdiction with a functioning insurance regulator. Texas, New Jersey, Connecticut, New Mexico, and Georgia all have their own state insurance regulators with authority over commercial licenses. Each one backs its state IDR process with the same structural enforcement: pay the award or risk losing the ability to operate in the state. Eliott Dear files in all six.

The federal system was supposed to be the backstop. In practice, the state systems became the backbone. The regulators with real authority over insurance carriers are the ones who have always been at the state level.

What This Means for Non-Par Physicians

If you are a non-participating provider and your patient is covered by a fully-insured plan in a state with a functioning IDR framework, your collection probability on a properly built submission is effectively 100%. Eliott Dear’s win rate on state IDR determinations is 99%, and the collection rate on those awards is effectively 100%. The combined math is the reason Claims Assassins exists as a practice.