Anthem sues 11 hospitals over No Surprises Act disputes

Anthem Blue Cross is suing 11 hospitals in California over disputes submitted to the independent dispute resolution, or IDR, process under the No Surprises Act. The hospitals are all part of Prime Healthcare, the fifth-largest for-profit hospital system in the U.S.

The private payer alleges in the lawsuit filed on Jan. 5 that some of Prime's hospitals abused the process by "knowingly flooding the IDR process with more than 6,000 ineligible disputes and extracting millions of dollars in wrongfully obtained awards."

As a result, hospitals extracted over $15 million more than what the payer would have paid for the services, with the typical award exceeding six times what a contracted provider would have been paid for the same service, Anthem reported.

Additionally, Anthem said it paid more than $2 million in IDR-related fees and operational costs to manage the large volume of disputes from the 11 hospitals.

"Rather than engaging with the IDR process as a forum for resolving good faith payment disputes over 'qualified IDR items or services,' Defendants use it as an extractive tool to gouge the healthcare system," the lawsuit states.

The lawsuit also criticized Prime Healthcare for "prioritizing profits over patients," as demonstrated by the hospital system's record of canceling network contracts to allegedly game the system for higher reimbursement.

Anthem contends that this misuse of the IDR process goes against the intention of the No Surprises Act, instead turning it into a "lucrative revenue stream" for bad actors.

The payer is seeking monetary damages from the hospitals, including relief from all improperly paid awards under the IDR process.

In a statement emailed to RevCycle Management, Prime Healthcare called the lawsuit "meritless," saying it complied with the requirements set by the No Surprises Act and for the IDR process.

"Anthem’s lawsuit ignores the reality that certain large health plans, including Anthem, amass record profits by underpaying providers, delaying or denying care, and burdening patients with administrative barriers, practices that have eroded the public trust," the statement continued.

The Anthem lawsuit, however, is just another in a growing list of cases challenging providers using the IDR process.

An Elevance health plan sued two Georgia providers and the medical billing company HaloMD in May, accusing them of illegally gaming the IDR process. Elevance is Anthem's parent company. It also alleged that the three organizations flooded the IDR process with thousands of ineligible claims.

UnitedHealthcare also has its own legal filing in which it is suing Radiology Partners, the U.S.'s largest radiology group, over misuse of the IDR process.

A report published by America's Health Insurance Plans (AHIP) and the Blue Cross Blue Shield Association in October 2025 found that nearly 40% of disputes submitted to the IDR process were ineligible in 2024. Still, many of these disputes advanced to arbitration, according to the report.

Jacqueline LaPointe is a graduate of Brandeis University and King's College London. She has been writing about healthcare finance and revenue cycle management since 2016.