Elevance Health Goes to Court (Because Why Just Deny Care When You Can Sue About It?)
A Healthcare un-Covered piece by Wendell Potter, a previous insurance executive, pulls back the curtain on what’s really happening with the No Surprises Act – and it’s not subtle. Insurers aren’t trying to tweak the law by rewriting it in court. Congress designed a neutral arbitration system, but it’s being attacked by a wave of coordinated lawsuits. Potter called it “lawfare,” and its dishonest to refer to it as anything other than that.
And yes, Anthem — now rebranded as Elevance Health – is at the center of it.
Across the country, insurers are filing near-identical lawsuits against doctors, hospitals, and billing companies that use the federal independent dispute resolution (IDR) process at scale. Same wording. Same accusations. Same story line about “abuse” of a law that was literally designed to be used. It’s not a coincidence, it’s choreography.
The core complaint? Providers are using IDR too much, which is rich, considering the process exists precisely because insurers keep underpaying for life-saving care that’s already been delivered. But instead of fixing that, health insurers have found a workaround: if you can’t change the rules, make following them risky enough that people stop trying.
So now, participating in a federal process meant to resolve payment disputes gets reframed as something suspicious and fraudulent. Lawsuits toss around terms like “coordinated enterprise” and even RICO violations, as if filing multiple arbitration claims in response to repeated underpayments is some kind of organized crime ring. It would be funny if it weren’t so effective.
Because here’s the part health insurers would rather not emphasize: the vast majority of cases sent to arbitration are deemed eligible by independent third parties. What that tells us is that doctors aren’t gaming the system; they are responding to systemic underpayment from health insurers.
That’s where things get awkward. When arbitrators don’t side with insurers, the narrative shifts. Suddenly, the awards are “excessive,” and the volume of disputes becomes an “avalanche.” And the existence of a neutral referee becomes a problem that needs fixing.
And then there’s the payment side of the equation, which deserves its own eye-roll. Reports show that health insurers' initial offers are sometimes shockingly low, down to literal pennies in extreme cases. When arbitrators later award significantly higher amounts, insurers point to the gap as proof that the system is broken. Not as proof that the starting number was the problem.
Instead of working with providers to enter into fair and sustainable networking arrangements, insurers are suing.
They sue providers, billing companies, and anyone who makes too much use of the process Congress created. They aren’t asking for corrections. They went big seeking treble damages, fraud findings, and court rulings that could fundamentally change how the law operates. This doesn’t even account for how it intimidates doctors away from using the system.
Last week, the U.S. District Court for the Central District of California dismissed every claim brought against HaloMD and its co-defendants by Anthem Blue Cross of California. Magistrate Judge Karen E. Scott pointed out that Anthem’s own complaint undercut its argument and made clear that the appropriate path was to participate in the Congress-built IDR process in good faith. She also rejected Anthem’s attempt to cast doubt on the arbitrator, reinforcing that disagreements on outcomes don’t justify rewriting the rules.
It’s a great step in the right direction, but there are many more lawsuits seeking to do the exact same thing.
Health insurers are trying to turn simple eligibility disputes into accusations of fraud. Under this theory, if a provider submits a claim that’s later deemed ineligible, that’s not an administrative hiccup – it’s grounds for legal liability. And while the logic didn’t stick once, if it did, it would effectively weaponize uncertainty and make participation in IDR a legal gamble most providers can’t afford.
This isn’t about cleaning up bad actors. It’s about raising the cost of pushing back. Small practices, independent physician groups, and safety-net providers don’t have the resources to fight multi-front federal litigation. Faced with that reality, many will stop using the No Surprises Act’s IDR process.
Elevance Health, for its part, may have rebranded, but its courtroom strategy feels very grounded in the old Anthem playbook: challenge aggressively, litigate often, and reframe the narrative when the outcomes don’t go your way.
At least one court has already started to see through this strategy. The dismissal in California signals that attempts to weaponize the legal system against lawful use of IDR won’t always hold up. But one decision is not enough. If the balance Congress intended is going to survive, it will take a broader trend where more courts recognize these tactics for what they are and reinforce that the answer to payment disputes is good-faith participation in IDR, not litigation designed to intimidate those who are forced to rely on it.