NJ arbitration award: 36 times the carrier's offer

A New Jersey arbitrator just awarded a doctor 36 times what the carrier offered to pay. That's 73 to 122 times what Medicare would have paid for the same services.

The case was multi-procedure hand surgery. Ten CPT codes. One date of service. The provider asked for $365,527. The carrier offered $10,311. The arbitrator picked the provider's number.

While that number is shocking, it wasn't an outlier. It's how the system has come to work.

The New Jersey OON statute doesn't tell arbitrators which benchmark to use. It's pure baseball arbitration. The arbitrator picks one of the two final offers and writes findings that reference "any databases, previous awards, or other documentation or arguments." That's it. No statutory anchor to charges, to allowed amounts, to Medicare, to anything.

In practice, arbitrators have settled on the FAIR Health charge percentile as the dominant reference. FAIR Health publishes two products for the same codes in the same geographic area. FH Allowed Benchmarks reflect what payors actually pay in-network. FH Charge Benchmarks reflect what providers chose to invoice. The two numbers come from the same underlying claims database. They are not close, and only one of them is anchored in reality. Providers win two out of three NJ arbitrations, and provider offers are typically anchored to the charge percentile.

Federal IDR has its own problems, in the other direction. 1.2 million cases in the first half of 2025. Providers winning 88 percent. PE-backed initiators driving the volume.

Volume is the strategy.

Both systems are broken. New Jersey is broken per case. Federal IDR is broken at scale. Plan sponsors are paying for both.

If you advise a NJ self-funded plan that opted in, pull your last twelve months of OON arbitration decisions. Look at the benchmark cited in the written findings. If it's FH Charge, the opt-in analysis you did in 2022 needs a second look.