Court KOs Insurer Challenge to No Surprises Act Arbitration Process

Last week, a federal district court dismissed a lawsuit brought by Anthem Blue Cross that challenged numerous billing disputes adjudicated under the independent dispute resolution (IDR) process provided by the federal No Suprises Act (NSA). The case, Anthem Blue Cross Life and Health Insurance Company, et al. v. HaloMD, LLC, et al., had been filed in the U.S. District Court for the Central District Court of California. The defendants included several medical practices and HaloMD, LLC, a Texas company that manages the submission of claims through the IDR process.  

The NSA created the IDR process to provide a separate framework outside the judicial process for health plans and out-of-network healthcare practitioners to resolve certain surprise billing disputes. If the parties are unable to resolve the dispute by negotiation, an arbitrator ultimately makes a payment determination that is final except in very limited circumstances. 

Anthem claimed that several medical practices and the company they used to manage the claims had fraudulently run claims through the IDR process. Specifically, Anthem claimed that the defendants had attempted to overwhelm the system by submitting an excessive number of claims. Second, that defendants submitted inflated payment amounts. Third, that defendants made false attestations to gain eligibility to the IDR process for ineligible claims.

Federal Magistrate Judge Karen E. Scott rejected all these claims. The court found that Anthem failed to identify any specific IDR cases where defendants had submitted false eligibility attestations. Further, the court rejected Anthem’s attempt to have the court exercise judicial review of the challenged IDR determinations, finding that none of the bases for judicial review provided for in the NSA were applicable here. The court also declined to exercise discretionary supplemental jurisdiction over the plaintiffs’ related state law claims.

As an exclamation point to its decision, the court dismissed Anthem’s case without affording Anthem the opportunity to amend its complaint. The court described leave to amend in this case to be “futile.”

"The IDR process is critical to ensuring physicians and specialty practices can obtain the fair and sustainable reimbursement they need to remain independent," said Scott LaRoque, CEO of HaloMD. "This ruling identifies Anthem's litigation for exactly what it was — a calculated attempt to bully providers into accepting unsustainable rates, driving them toward consolidation under the very insurance companies that refused to pay them fairly in the first place."

Read the opinion and order here.