This article originally appeared in AHLA’s Health Law Daily, August 2025.

Payment conflicts have grown sharply in both volume and complexity—reported provider-payor disputes rose in the first half of 2024 as compared to 2023. Out of network emergency care is especially contentious, as more than one million Independent Dispute Resolution cases were filed last year under the No Surprises Act.[i] Regulators and payors now rely on statistical sampling and extrapolation to pursue overpayment demands, and courts and arbitrators increasingly require each side to back its position with rigorously designed sampling plans.

These developments share a common theme: understanding your data drives outcomes, and success hinges on the quality of the underlying analytics. This is the reason why forward-looking organizations no longer wait for formal litigation or arbitration. Instead, they rely on the results from privileged statistical reviews early, gaining insight that can steer negotiations and create a ready foundation for expert evidence should the dispute advance.

Engaging Statistical Consultants Under Privilege

Pre-dispute statistical consulting involves bringing in a qualified statistician before any formal legal action is filed—often even before a claim is formally in arbitration or litigation. Importantly, this consultant is engaged through legal counsel and under attorney-client privilege (and work-product protection). By doing so, all analysis, findings, and communications can be kept confidential and protected from disclosure, unless and until the organization chooses to use them (for example, as expert evidence in a case).

This approach is gaining traction. Many health systems now engage statistical consultants under privilege long before a case enters arbitration or litigation. The statistician works closely with the legal team and client to perform in-depth data analyses related to the dispute in question. These statisticians typically assist by estimating the financial exposure or potential damages at stake and helping to design provider-led sampling strategies that could be used if the matter proceeds to formal dispute. In essence, the consultant is building the analytical foundation of the case early, under the protection of privilege.

Why engage these experts under privilege? There are several strategic advantages:

• Confidential Early Assessment: Working under privilege maintains confidentiality and work-product protection for all analysis performed. The organization can candidly explore the strengths and weaknesses of its position using data, without fear that unfavorable findings will be exposed. This enables a truly honest early case assessment—if the analysis reveals major problems in the client’s billing or the payor’s claims, the legal team can know this upfront and plan accordingly, without those results automatically falling into an opponent’s hands.
• Identifying Disproportionate Denial Patterns: Before any formal complaint is filed, a statistical review of claims data can uncover patterns of potentially unfair treatment or procedural anomalies. For example, an analysis might show that a provider accounted for only 4% of a plan’s claims but 8% of that plan’s denials, a red flag for disproportionate scrutiny by the payor. Another insight might be that certain CPT codes have unusually high denial rates at specific hospital facilities, suggesting the payor is systematically rejecting those services at those locations. Findings like these can form a compelling narrative: they quantify biases or inconsistencies in the payor’s process that a mediator, arbitrator, or judge could later find persuasive.
• Strengthening Negotiation and Pre-Dispute Strategy: By quantifying the scale and financial impact of the issues, the consultant’s analysis helps the legal team prioritize where to press and where not to. If the data show one particular issue (say, denials of a certain code) is responsible for the bulk of financial losses, the provider can focus on resolving that item. Armed with empirical evidence, the provider (or payor) enters pre-litigation negotiations with stronger leverage. Data-driven arguments can facilitate a settlement or compromise before the dispute ever goes to court. For instance, demonstrating that an audit’s repayment demand is statistically unsound can prompt a payor to reconsider or reduce the demand during appeal or settlement talks.
• Preserving Options for Litigation or Arbitration: Engaging a statistician early creates a ready-to-deploy foundation for expert evidence, if needed later. All groundwork—cleaning the data, designing the sampling plan, analyzing preliminary results—is done under privilege. If the dispute cannot be resolved amicably and proceeds to arbitration or litigation, the organization can decide to waive privilege on this analysis, designate the consultant (or a colleague) as a testifying expert, and hit the ground running. The prior work can be quickly converted into formal expert reports or testimony, accelerating the litigation timeline. Essentially, the pre-dispute analysis ensures no time is lost if a legal battle ensues; it can even shape the legal strategy by highlighting which claims are strongest. Notably, since many courts or arbitrators eventually order statistical experts to be involved anyway, doing this work upfront means you are a step ahead and fully prepared.

Conclusion and Business Considerations

Pre-dispute statistical consulting marries data analytics with legal strategy in a confidential setting, allowing providers and payors to thoroughly understand the numbers driving a dispute and to craft a fact-based position early on. By doing so under privilege, organizations retain full control over how and when those analytical findings are used and which proactive steps can be taken to mitigate risk.

Given the trends of rising disputes and advanced analytics in audits, organizations should carefully evaluate their dispute history and upcoming challenges. If an organization is facing recurrent denials, significant audit recoveries, or complex payment disagreements, it may want to consider adding a pre-dispute statistical consultant.

Reach out to Stefan Boedeker and Okem Nwogu to discuss these topics and how StoneTurn can help.

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[i] https://www.fiercehealthcare.com/finance/providers-still-topping-health-plans-most-disputes-over-out-network-payments.