Don’t Blame Doctors for a System Insurers Designed
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Colleagues:
The New York Health Plan Association’s recent op-ed that compared Medicaid billing and the IDR process to a plumber’s charges for a leaky faucet makes for a catchy headline. It also fundamentally misrepresents what’s happening in New York’s Medicaid Independent Dispute Resolution (IDR) process.
This is not a story about plumbers charging $15,000 to fix a sink. It’s a story about insurers refusing to negotiate fair reimbursement up front, underpaying for complex, high-risk emergency care, declining reasonable settlement offers, dragging every dispute into binding arbitration—and then complaining to the public when they lose.
Let’s be clear about the sequence of events.
First, insurers routinely refuse to offer reasonable contracts for complex specialty and emergency care. They know physicians on call at 4 a.m. cannot “shop around” a neurosurgical emergency or spinal cord compression case. The patient needs care immediately. The physician shows up. The surgery happens.
Second, insurers often issue payments that bear little resemblance to the complexity, liability exposure, training, and resource intensity involved. The Medicaid fee schedule for certain highly specialized emergency surgeries can be a fraction of commercial market rates—sometimes thousands of dollars for procedures that require years of subspecialty training, carry life-altering risk, and involve teams on standby 24/7.
Third, when physicians attempt to negotiate, insurers increasingly refuse reasonable settlement offers. Instead, they push nearly every dispute into IDR—the equivalent of binding arbitration—where an independent reviewer examines market data and determines what is reasonable for that geographic area and specialty.
Then, when insurers lose in that independent process, they characterize the outcome as “exploitation.”
You can’t design the system, refuse to negotiate in good faith, choose arbitration, lose under an independent standard—and then claim the system is rigged against you.
At a recent legislative hearing, insurers asked for five-year certainty in state funding. That certainty, apparently, is necessary to ensure executive compensation packages remain intact—roughly $5 million for one CEO, $60 million for another, $2.3 million for a third.
Meanwhile, the emergency physician answering the call at 4 a.m., the anesthesiologist managing a crashing trauma patient, the neurosurgeon decompressing a spinal cord to prevent paralysis—those physicians are told that receiving market-based reimbursement is somehow abusive.
If insurers truly believed the IDR process was unfair, they would negotiate reasonable contracts upfront. They would not systematically push disputes into arbitration. They would not rely on delay and administrative burden as leverage.
Instead, physicians and hospitals are drowning in prior authorizations, electronic referral hurdles, and AI-driven “slop audits” that second-guess clinical decisions from behind a desk. One institution now has six administrators for every physician—largely to manage insurer denials and compliance demands. That administrative bloat is not driven by patient care. It is driven by insurer behavior.
Some have argued that Medicaid patients are already protected from surprise bills, and therefore, IDR is unnecessary. But that misses the point entirely.
IDR does not protect patients from bills—that protection already exists. IDR protects access to specialists willing to remain on call and treat Medicaid patients in emergencies without guaranteed payment.
High-acuity specialties—neurosurgery, anesthesiology, radiology, orthopedics—require around-the-clock availability. If reimbursement is arbitrarily capped at rates far below market value, many physicians will simply opt out of Medicaid call panels. That does not punish insurers. It punishes patients.
And let’s address the “excessive charge” examples often cited. The IDR arbiter does not blindly accept a physician’s billed amount. The reviewer compares both sides’ proposals to regional charge data and makes a determination based on objective standards. If insurers are losing repeatedly, it suggests their payment offers are not aligned with prevailing market benchmarks—not that independent reviewers are irrational.
Insurers are sophisticated actors. They know exactly how IDR works. They already lost litigation because of previous manipulation of rates. They know what cases are likely to win or lose. Yet they increasingly send disputes there anyway.
Why? Because the delay itself is leverage. Because volume creates political pressure. Because framing physicians as profiteers shifts attention away from executive compensation, prior authorization overreach, and administrative overhead.
Big insurance has already structured a system heavily tilted in its favor. Now it seeks to eliminate the last neutral mechanism that ensures physicians providing complex, emergency care are compensated at rates reflecting actual market conditions.
If insurers truly cared about Medicaid patients, they would focus on:
- Fair, upfront contracting.
- Timely, hassle-free payment.
- Reducing prior authorization barriers.
- Supporting member access to high-acuity specialists.
Instead, they are asking lawmakers to remove the independent backstop that prevents unilateral underpayment.
Medicaid patients deserve high-quality emergency and specialty care. Access depends on maintaining a sustainable physician workforce willing to remain on call.
Eliminating IDR from Medicaid will not “fix a leaky faucet.” It will turn off the water entirely.
New York should preserve IDR—not to enrich physicians—but to protect patient access, maintain fairness in disputes, and prevent insurers from becoming both player and referee in determining what care is worth.
Because when a loved one needs emergency surgery at 4 a.m., the last thing New Yorkers should worry about is whether the only available specialist has decided the system is no longer sustainable.
As The Voice of New York Physicians, MSSNY must speak clearly on the needs of our patients and our profession. Advocacy matters. If you have not yet done so, please renew your MSSNY membership. If you are not a member, consider joining.
Donating to the PAC is another way to support our profession in its advocacy, as well as reviewing the MSSNY Grassroots Action Center for action items.
Most importantly, please plan to come to Albany on March 10 for MSSNY’s Annual Physician Advocacy Day.
Your voice matters. MSSNY amplifies that voice.
All the best,
David Jakubowicz, MD, FACS
MSSNY President
