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.
