A California federal court decisively dismissed racketeering claims that a leading commercial payer brought against physician practices that use the federal No Surprises Act (NSA) Independent Dispute Resolution (IDR) process. The court ruled against Anthem Blue Cross, which had alleged that numerous physician groups violated the Racketeering Influenced and Corruption Organizations (RICO) Act, the NSA and California state laws.i
Anthem maintained that the practices “manipulate[d] the IDR process” by “strategically submitting massive numbers of open negotiations and IDR initiations” to prevent Anthem from contesting those claims. Additionally, Anthem charged that the practices made “repeated false statements [and] representations” about whether their surprise billing claims were eligible for dispute resolution. Those false statements caused the IDR arbitrators to award “millions of dollars” to the practices although Anthem protested that the claims were ineligible. Consequently, Anthem requested that the court vacate those IDR awards because those resulted from “fraud and undue means” through the false eligibility attestations.
Yet the court soundly rejected Anthem’s characterizations of the IDR process under the NSA. For instance, Anthem provided no evidence that it was unable to contest the eligibility of individual IDR claims. The court also denied the payer’s attempt to apply to the IDR process the arbitration rules of other forums that exist outside that process. Notably, the court ruled that Anthem’s position would have undermined the NSA’s establishment of a “streamlined” IDR process. Anthem also failed to persuade the court that the judicial branch should review seemingly ineligible IDR awards. The court concluded that the NSA regulations specifically authorize the arbitrators to decide eligibility.
Anthem may appeal the district court’s ruling. For now, though, this decision helps ACR® members and their practices because it stopped a key payer’s efforts to use the courthouse to challenge the NSA dispute process that Congress and regulators established.
If you have questions or would like more information, contact Tom Hoffman, ACR Chief Legal Counsel and Executive Vice President, Governance and Membership Services.
iAnthem Blue Cross Life and Health Insurance Company, et al. v. HaloMD LLC, et al. (C.D. Cal., Apr. 9, 2026).
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