Elevance Health's headquarters in Indianapolis. Credit: iStock

Two health insurance companies owned by Elevance Health are suing health care providers and a billing service over claims for out-of-network care.

The providers and the biller flooded No Surprises Act independent dispute resolution services, or IDR services, with disputes that were not eligible for the No Surprises Act IDR process, the Elevance subsidiaries say in court filings.

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One Elevance subsidiary, Blue Cross Blue Shield Healthcare Plan of Georgia, filed a complaint in May in the U.S. District Court for the District of Georgia. The other subsidiary, Anthem Blue Cross and Blue Shield of Ohio, filed a similar complaint Tuesday in the U.S. District Court for the Southern District of Ohio.

The defendants in the Georgia case are the HaloMD billing service and three Georgia-based group medical practices.

The defendants in the Ohio case are Halo MD, a HaloMD executive and four Ohio-based medical services firms.

The Georgia defendants engaged in a "coordinated fraudulent scheme to steal tens of millions of dollars from Anthem, employer sponsors, and other Blue Cross Blue Shield companies," according to a complaint that Georgia Blue filed in May in the U.S. District Court for the District of Georgia.

The defendants launched "massive volumes of IDR disputes" against Georgia Blue, and they demanded "outrageous payment offers that far exceed what the provider defendants could have received from patients or health plans in a competitive market," Georgia Blue said.

In Ohio, "Anthem and its employer plan sponsor customers have paid excessive amounts for medical services and incurred unnecessary administrative and arbitration fees," Anthem of Ohio said in its complaint. "The financial harm caused by defendants' abusive practices is ongoing and threatens the affordability and sustainability of health benefits for Anthem's members."

Georgia Blue and Anthem of Ohio are accusing the defendants named in their complaints of committing fraud, deception, violations of the federal Racketeering Influenced and Corrupt Organizations Act and violations of Employee Retirement Income Security Act provisions.

HaloMD rejected the Elevance subsidiaries' allegations.

"The Blue Cross Hydra is continuing its lawfare with another suit attacking the No Surprises Act and its patient protections and smearing the one company defending fair reimbursement for physicians," HaloMD said in its response. "We'll be contesting these suits to the full extent of the law and continue fighting for doctors to be paid for the care they deliver."

The No Surprises Act: The new Elevance subsidiary suits are related to the No Surprises Act, a federal law that was part of the Consolidated Appropriations Act of 2021.

Congress enacted the law in an effort to address longstanding concerns that many patients with health coverage who thought they were following the rules of their plans ended up facing large, unexpected out-of-pocket expenses.

The No Surprises Act includes provisions aimed at eliminating two types of surprise medical bills: bills for out-of-network emergency care and care patients who go to in-network hospitals get from out-of-network physicians.

Plans and providers are supposed to have the patients pay their share of the costs at in-network rates, then work with each other or use IDR services to resolve any remaining disagreements over the amounts the plans should pay.

The providers have accused health plans and plan administrators of working with claim administrators to hold down reimbursement rates for out-of-network care in ways that violate federal antitrust laws.

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The defendants in those cases have argued that they have been using public information to fend off outrageously high bills for out-of-network care.

The new suits: Georgia Blue said 70% of the Georgia IDR dispute payment determinations involving the defendants in its case were for claims that were clearly ineligible for the No Surprises Act IDR process.

Georgia Blue reported that the defendants started 342 disputes on May 3, 2024, including 279 that were clearly not eligible for the IDR process.

But Georgia Blue lost 192 of the disputes, in part because of the defendants' use of false eligibility attestations, and it was ordered to make $390,704.69 in extra reimbursement payments and pay $118,754 in IDR process fees, the company said.

In Ohio, about 50% of the Ohio IDR dispute payment determinations were for claims that were ineligible for the IDR process, and those disputes led to $25 million in improper IDR awards, according to Anthem of Ohio.

Anthem of Ohio said the defendants in its case started a wave of 312 IDR disputes against it on Dec. 26, 2024, with 174 being ineligible for the IDR process.

The defendants won 88 of the disputes. That led to Anthem of Ohio making $1.4 million in extra reimbursement payments and paying $52,246.63 in IDR process fees, the company said.

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Allison Bell

Allison Bell, a senior reporter at ThinkAdvisor and BenefitsPRO, previously was an associate editor at National Underwriter Life & Health. She has a bachelor's degree in economics from Washington University in St. Louis and a master's degree in journalism from the Medill School of Journalism at Northwestern University. She can be reached through X at @Think_Allison.