# Federal vs State IDR: Which Process Applies to Your Claim
Before any underpaid out of network claim can be disputed, someone has to answer a question most billing teams never ask: which arbitration system does this claim belong to? Get it wrong and the dispute is dead on arrival. Filing a state regulated claim in the federal portal produces an ineligibility finding, and eligibility challenges already hit a huge share of national filings, with payers challenging eligibility on 44 percent of disputes in 2024.
After two decades of billing across these payer types, here is the cleanest way to think about it.
The dividing line is the plan, not the patient or the procedure
The federal IDR process governs self insured employer plans, the arrangements where the employer bears the claims risk and an insurer merely administers. These plans are regulated federally under ERISA, which is why state surprise billing laws cannot reach them. Self insured plans cover the majority of workers with employer based coverage, so the federal process is the default workhorse for most surgical volume.
Fully insured plans, where the insurer bears the risk and the state insurance department regulates the product, are different. In states with their own surprise billing laws, a fully insured claim may route to the state process instead of the federal one.
Why this matters in our six states
Every state Kronos actively serves has its own surprise billing framework: Texas, New York, California, New Jersey, and Florida all run bifurcated systems where state law governs fully insured state regulated plans, and Arizona has its own dispute framework as well. The same CPT code, the same surgeon, the same underpayment can be a federal IDR claim on Monday and a state arbitration claim on Tuesday depending entirely on how the patient's employer funds its health plan.
The two pathways differ in ways that change strategy: deadlines, fee structures, evidence standards, and in New York's case, a lookback that reaches years further than the federal windows. A claim misrouted in either direction loses time it cannot recover.
How to tell which plan you are holding
The plan type is discoverable, but it takes deliberate checking: the member ID card carries clues, the payer can be asked directly during open negotiation, and the EOB language often signals the funding arrangement. The honest problem is that this verification step takes time per claim, and busy billing teams skip it, which is exactly how winnable claims end up filed in the wrong system.
Plan type determination is a standard step in my team's intake on every single claim. Federal claims go to the federal portal, state claims go to the state pathway, and the deadlines for each are tracked from day one. Navigating both pathways is a core part of what a practice hires us for.
If you are sitting on out of network underpayments and are not certain which system they belong to, that uncertainty is itself the signal. Send us 3 to 5 recent EOBs and we will tell you the routing, the deadline status, and the estimated recovery on each.