PSD Wins Dismissal with Prejudice of RICO and Fraud Claims Against Healthcare Clients in the Eastern District of Virginia Concerning No Surprise Act Arbitrations

Anthem Health Plans of Virginia brought a RICO lawsuit against PSD’s clients, consisting of a group of emergency and hospitalist clinician staffing and management services to hospitals and healthcare facilities. The claims arose from the independent dispute resolution (IDR) process created by the No Surprises Act (NSA) that is used to resolve certain billing and reimbursement disputes between health plans and out-of-network providers. Having lost the vast majority of NSA arbitrations initiated by the providers, Anthem claimed, among other things, that the providers violated and conspired to violate federal racketeering laws, committed fraud and violated the Virginia Unfair and Deceptive Trade Practices Act by submitting thousands of disputes that were ineligible for the IDR process, making false representations and attestations of eligibility, manipulating the IDR process by submitting large numbers claims, and demanding inflated, commercially unreasonable payment amounts.

The United States District Court for the Western District of Virginia dismissed the case with prejudice, agreeing with PSD’s positions, including that the NSA limited judicial review of IDR awards to narrow vacatur grounds under Section 10 of the Federal Arbitration Act, and ruling that Anthem could not circumvent those limits by repackaging challenges to arbitration awards as RICO or other claims. The court also ruled that Anthem had failed to allege grounds for fraud or vacatur under the FAA, including because it had all the information necessary to object to the arbitration eligibility and resulting awards during the IDR process.

Susan Cooke, Barry Pollack, Phillip Rakhunov and Joshua Solomon represented the client in this case.

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PSD is proud to be a hole sponsor at the September 17, 2026 Big Golf Tournament to benefit Big Brothers Big Sisters of Eastern Massachusetts.

PSD partner Phillip Rakhunov represented a former franchisee of a junk removal business a dispute arising from the client’s sale of business assets to defendants. Shortly after acquiring the assets of the business, buyers repudiated on outstanding payment obligations under a seller financing note and sought recission claiming they were fraudulently induced into the transaction. PSD brought a civil action on behalf of its client to enforce the contractual terms of the asset sale. Defendants counterclaimed for breach of contract, fraud, and violation of Chapter 93A, among other things.

Following a hotly contested eight-day bench trial, the court issued a verdict in PSD client’s favor on its breach of contract claims, dismissed all of the defendant’s counterclaims and third-party claims, and awarded attorneys’ fees against the defendants.

In May 2020, an entity owned by a California physician filed a qui tam action under seal against PSD client emergency medicine provider staffing company and its affiliate alleging the use of upcoding when billing for emergency medical services, including by pressuring providers into charting for critical care services through allegedly “leading queries and misleading information” contained in “chart deficiency notices,” and by allegedly “upcoding” non-critical care to a higher, more profitable levels of care. In April 2024, the United States Department of Justice, the State of California and seventeen other state agencies declined to intervene in the qui tam action, and the case was unsealed.

Although relator plaintiff alleged nationwide schemes involving hundreds of facilities, the relator’s experience and claims were based on its principal’s personal investigation involving a sampling a handful of charts at one California hospital where the relator’s principal worked. In January 2026, PSD filed a motion to limit all remaining discovery to the one California hospital and to bifurcate the case to determining whether any FCA violations occurred even at that one hospital. PSD argued that production of nationwide protected health information for sampling and the prospect of numerous depositions of medical providers nationwide would be unduly burdensome, invasive to patient privacy and disproportionate to relator’s allegations that primarily focused on the one hospital.

The Court agreed with the defendants and, on March 17, 2026, issued a ruling that found nationwide discovery to be disproportionate to the needs of the case and bifurcated discovery to limit efforts to discovery concerning one California hospital rather than allowing discovery concerning services at hundreds of other hospitals nationwide. More recently, the DOJ and state governments of record have consented to the dismissal of the action without any recovery for government entities.

Mary Nguyen, Barry Pollack, Phillip Rakhunov and Joshua Solomon represented the client in this case.

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PSD is proud to welcome new Partner Susan Cooke who is an experienced investigator, securities laws advisor, civil litigator, and trial attorney. Susan has an exceptional collection of accomplishments in government investigations, securities matters, and jury trials. During a prolific career as a trial, senior trial, and enforcement counsel with the SEC, she spearheaded litigations involving complex fraud and compliance issues, with a focus on matters in the asset management, health care, and life sciences industries. Susan secured a jury verdict in a first-of-its-kind case concerning the fiduciary obligations of registered investment advisers selling insurance products, won a federal insider trading trial for the SEC after an acquittal in the parallel criminal case, and obtained a jury verdict on all claims in a trial against the CFO of a publicly traded biotech company for fraudulently concealing negative developments involving the FDA.

Susan leads PSD’s Private Equity, Hedge Fund, and Founder Litigation practice area.

PSD filed an unfair competition claim by a large plaintiffs’ law firm against a self-proclaimed “national firm” that has described its nerve center as a call center. Coverage appeared in the Boston Globe, Lawyers Weekly, Law360, Boston Business Journal, the Insurance Journal, and Channel 5

In its new edition, Chambers & Partners has named PSD as one of five top boutique firms in the Boston area that focuses on white collar defense.

After a series of victories and developments that resulted in the dismissal of each and every charge of money laundering, violations of the Anti-Kickback Statute, and conspiracy charges, PSD’s client, on August 6, 2025, the CEO of a medical device company known as SpineFrontier, received a sentence of time served of one day, followed by 12 months of supervised release. The CEO resolved the matter, pending in the United States District Court for the District of Massachusetts, for a single reduced charge of making one false statement to CMS in which a payment was classified as a consulting payment when consulting services had not been received. Federal prosecutors lost their arguments to the Court seeking the maximum term of incarceration under the sentencing guidelines, focusing their arguments on the totality of problems in the health care industry rather than on the limited evidence in the record against the CEO. The proceedings exhausted years of efforts by the government involving more than a half-dozen present and former federal prosecutors who faced several motions during the course of the case based on grounds of government misconduct.

Despite the dismissed charges in the Indictment and a Superseding Indictment having exposed defendants and their company to decades of incarceration and tens of millions of dollars in fines, the Court imposed only a $9,500 fine on the CEO. All charges against SpineFrontier were dismissed.

PSD founding partner and former federal prosecutor, Barry Pollack, is an honoree included in the 2026 edition of Best Lawyers.