Eliott Dear on FAIR Health vs the Allowed Amount: Why the Benchmark Matters

The Two Numbers

Every out-of-network claim carries two numbers. One is the allowed amount on the carrier’s EOB. The other is the FAIR Health 80th percentile for the same CPT code in the same area. In New York state IDR, the benchmark is the FAIR Health 80th percentile. These two numbers almost never agree, and the gap between them is usually the entire fight.

Eliott Dear has been running the comparison on live claims for nearly two decades, and the pattern barely moves.

FAIR Health Is Independent. The Allowed Amount Is Not.

FAIR Health is a nonprofit database funded by a 2009 settlement with the New York Attorney General after UnitedHealth was caught manipulating the old Ingenix database to lowball out-of-network reimbursement. Every major insurer contributes billing data. The 80th percentile is a transparent, third-party number the insurer cannot move.

The allowed amount is set by the insurer itself. The insurer picks the number, applies its own pricing, and prints the result on the EOB without the math behind it. Every input is insurer-controlled.

Why the Benchmark Matters

In New York state IDR, the arbitrator is presented with the FAIR Health 80th percentile as the provider’s anchor. It is independently verifiable, third-party data. The insurer can argue that the provider should get less, but the benchmark itself is not the insurer’s number.

That is why every submission leads with the FAIR Health figure for the exact CPT code and ZIP, set beside the carrier’s allowed amount on the EOB.

What It Means for the Practice

On a typical non-par ER plastic surgery claim, the carrier’s allowed amount often lands far below the FAIR Health 80th percentile for the same CPT code in the same ZIP. The gap is not marginal. It is the entire economics of a non-par practice.

Eliott Dear personally verifies the FAIR Health benchmark on every Claims Assassins IDR submission. It is the same discipline a Clifford Chance structured finance associate would bring to a valuation clause in a securitization agreement. The number is either defensible or it is not.