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Judge dismisses No Surprises Act lawsuit against HaloMD

A California federal court threw out Elevance Health's lawsuit against HaloMD, alleging the organization has gamed the No Surprises Act's IDR process for profit.

Jacqueline LaPointe
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Published: 14 Apr 2026

A federal judge in California recently dismissed a lawsuit accusing HaloMD and several provider organizations of exploiting the No Surprises Act for financial gain.

Elevance Health's subsidiary, Anthem Blue Cross of California, alleged in the lawsuit that HaloMD and affiliated providers initiated at least 1,500 disputes against Anthem through the law's independent dispute resolution (IDR) process between January 2024 and August 2025. Of those disputes, nearly half were ineligible, Anthem said.

The payer accused HaloMD and other plaintiffs of turning the IDR process "into a vehicle of fraud," by extracting millions of dollars in improper IDR awards.

However, Central District of California Judge Karen Scott said in an April 9 ruling that the No Surprises Act limits judicial review of IDR results and the court cannot pass judgment even if Anthem believes the process is "deeply flawed."

Rather, Anthem would need to appeal to Congress to resolve any policy-based complaints it has with the IDR process, the ruling added. It called all of Anthem's theories "end runs" around the No Surprises Act's limits on judicial review.

HaloMD celebrated the ruling, calling it a "victory" for the law passed in December 2020 to shield patients from unexpected medical bills.

"The No Surprises Act was passed to protect patients and ensure fair reimbursement for out-of-network care," Justin Carangelo, general counsel for HaloMD, said in a statement on April 13. "This decision defends the integrity of that system. We are grateful the Court recognized that allowing insurers to relitigate every unfavorable arbitration outcome in federal court would completely undermine Congressional intent."

In response, a spokesperson for Elevance said the company strongly disagrees with the ruling, which focused on a procedural issue and did not address all of its arguments.

"We believe it misinterprets the No Surprises Act and improperly limits judicial review, and we intend to appeal with confidence in our position," they said in a note to RevCycle Management. "Elevance Health will continue to hold billing companies and out-of-network providers accountable for practices that we believe drive up healthcare costs and burden consumers, as we work to support the intent of the No Surprises Act and advance a healthcare system that is transparent, fair, and drives down the cost of care for the people we serve."

A process plagued by problems

Since its inception, payers and providers have heavily criticized the IDR process. The complaints have largely centered on the process' high administrative costs, massive backlogs and disputes over payment benchmarking.

Payers specifically have alleged that providers abuse the process by flooding it with claims, some of which are not even eligible for payment determinations per the law. Research from the Commonwealth Fund has shown that the process favors providers, with providers winning the majority of resolved cases and receiving payment rates significantly higher than typical in-network rates.

This tip has put a spotlight on who exactly has been submitting disputes. For example, a recent analysis from Georgetown University's Center on Health Insurance Reforms found that large provider groups and middlemen like HaloMD tend to initiate the most disputes and win.

In fact, the analysis found that HaloMD, which specializes in arbitration, initiated most disputes, accounting for 17% of all disputes in the first quarter of 2025 and 22% in the second quarter of 2025.  

HaloMD also prevailed in 87% and 82% of its disputes in the first two quarters of 2025, respectively.

Additionally, the analysis showed that IDR entities deemed almost a fifth of disputes ineligible for the IDR process despite payers challenging 40% of cases. However, it also noted that 22% of IDR determinations in the first half of 2025 resulted from default decisions in which only one party submitted a payment offer and paid the fees.

Concerned with the alleged number of ineligible claims, payers have increasingly sought legal relief. There are currently at least nine cases in the courts, including four lawsuits against HaloMD in California, Georgia, Ohio and Texas.

However, providers maintain that the IDR process exists to ensure fair reimbursement for out-of-network care because payers have used flawed, low-payment methodologies that force providers to seek arbitration.

"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."

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.

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