Federal and State Investigations, and Lawsuit Involving Anthem/Elevance

Summary: This article provides a comprehensive, fact-based review of federal and state investigations, regulatory actions, and civil litigation involving Anthem, Inc. and its parent company, Elevance Health, spanning 2015 through 2025. Drawing from publicly available court records, enforcement actions, arbitration decisions, and regulator findings, it examines matters across Medicare Advantage, Medicaid managed care, commercial coverage, behavioral health parity, antitrust enforcement, provider disputes, and broker compensation practices. Each section documents who brought the action, the alleged or substantiated conduct, the time period involved, the financial exposure or penalties at issue, and the current status of each case, offering payers, providers, and compliance professionals a consolidated reference for understanding Anthem/Elevance’s regulatory and legal risk history.

California Grievance System Fines (2017, 2024)

Who: California Department of Managed Health Care (DMHC) – state regulator for health plans.

What: In 2017, DMHC cited Anthem Blue Cross of California for systemic failures in handling member grievances and appeals. Regulators found 245 violations (delays, inadequate responses to consumer complaints) from 2013 to 2016. DMHC initially levied a $5 million fine. After negotiations, Anthem agreed in June 2019 to pay $2.8 million and invest $8.4 million in process improvements to settle the case. Later, in December 2024, DMHC again fined Anthem $3.5 million for similar issues – specifically, tens of thousands of late or missing grievance acknowledgment and resolution letters between 2020 and 2022. Anthem admitted to these compliance lapses, paid the fine, and reported that it has implemented new training and procedures to meet state timelines.

When: Violations occurred 2013–2016 (addressed in 2017–2019) and 2020–2022 (addressed in 2024).

Financial Impact: $2.8M and $3.5M fines (plus mandated operational investments).

Status: Resolved. The 2017 violations were settled in 2019; the 2024 fine was paid with corrective actions in place.

Sources: California Healthline, DMHC Press Release.

Medicare Advantage Overpayment Audits (2015–2021)

Who: U.S. Department of Health & Human Services Office of Inspector General (HHS OIG) – federal auditor of Medicare; Anthem (Elevance) as a Medicare Advantage Organization.

What: An OIG audit examined 2015–2016 diagnosis codes Anthem submitted for Medicare Advantage risk adjustment. The audit targeted high‐risk diagnoses and found that in 123 of 203 sample cases, Anthem’s coding lacked support in medical records. These errors led to net overpayments to Anthem, extrapolated to $3.47 million during 2015–2016. OIG concluded Anthem’s policies to detect and correct coding errors were not always effective. They recommended Anthem refund $3.47 million and strengthen compliance for high-risk codes.

When: Audit findings announced May 2021, covering payment years 2015–2016.

Financial Impact: $3.47 million in Medicare overpayments identified for recoupment.

Status: Disputed/Ongoing. OIG stood by its findings, but Anthem disagreed, questioning the audit’s methodology and regulatory interpretation.

Sources: Healthcare Finance News, ISASS Policy News.

DOJ Lawsuit over Medicare Advantage “Upcoding” (2020–Present)

Who: U.S. Department of Justice (Southern District of NY); Anthem, Inc. (Elevance) – Medicare Advantage insurer.



What: In March 2020, the DOJ filed a civil False Claims Act suit alleging Anthem improperly inflated Medicare Advantage payments by submitting unsupported diagnosis codes and falsely certifying their accuracy. Anthem ran a retrospective chart review program that added diagnoses but failed to delete those found to be unsubstantiated, boosting risk scores (calling the program a “cash cow”). DOJ says this yielded Anthem “hundreds of millions” in unjust payments. The complaint also alleges Anthem falsely attested to CMS that its data was accurate and that it would correct any discrepancies.

When: Investigation intensified in 2018; lawsuit filed March 27, 2020. In September 2022, a judge denied Anthem’s motion to dismiss, finding the alleged $100+ million in overpayments “substantial” under FCA standards.

Financial Impact: The complaint implicates $100+ million in additional payments per year. Potential treble damages and penalties are at stake if proven under the FCA.

Status: Ongoing. As of 2025, the case remains active in federal court. Anthem’s bid to dismiss was rejected, and the suit is proceeding through litigation. No settlement or judgment has been reached yet.

Sources: DOJ Press Release, JD Supra.

Medicaid Contract Dispute in Kentucky (2020–2024)

Who: Kentucky Cabinet for Health & Family Services; competing insurers (Aetna, Humana, WellCare, UnitedHealthcare, Molina); Anthem Kentucky (Elevance subsidiary).

What: In 2020, Kentucky rebid its Medicaid managed care contracts (worth ~$15 billion/year) and did not select Anthem for renewal. Anthem sued the state, alleging flaws in the bid process and seeking to retain its share of 170,000 Medicaid enrollees. While litigation was pending, Anthem was allowed a temporary contract share under a 2020 injunction. Ultimately, in March 2024, the Kentucky Supreme Court upheld lower court decisions siding with the state’s awards to Anthem’s five rivals. This effectively removed Anthem as a Kentucky MCO.

When: Contracts awarded 2020; court battles through 2021–2023; state Supreme Court decision March 2024.



Financial Impact: Loss of a contract worth an estimated hundreds of millions annually in Medicaid revenue (Anthem’s portion of the $15B program).

Status: Resolved. Anthem’s legal challenge failed – the contracts for 2021–2024 proceeded without Anthem, and Kentucky formally transitioned Anthem out by January 2025.

Sources: Business Insurance, Kentucky Health News

Medicare Advantage “Broker Kickback” Allegations (2025)

Who: U.S. Department of Justice; U.S. ex rel. Shea (whistleblower); Elevance Health (Anthem), Aetna, Humana; and insurance brokers eHealth, GoHealth, and SelectQuote.

What: In a May 1, 2025, complaint, DOJ accused these Medicare Advantage insurers of paying “hundreds of millions of dollars” in illicit incentives to brokers to enroll healthier, lower-cost seniors into their plans. From 2016 to 2021, Anthem/Elevance and others allegedly provided excessive commissions or payments (deemed kickbacks) to steer profitable beneficiaries into their MA plans and to discourage enrollment of costlier patients (such as disabled individuals). This violates the federal Anti-Kickback Statute and False Claims Act. The lawsuit details instances of seniors being enrolled in plans without their consent or being placed in policies that do not meet their needs due to these practices.

When: Alleged conduct occurred 2016–2021; DOJ intervened and filed suit in 2025.

Financial Impact: The government cites “hundreds of millions” paid in kickbacks and corresponding Medicare payments at issue. Potential FCA damages could be several times the loss amount.

Status: Ongoing. The case was newly filed in 2025 and remains in early litigation. Elevance (Anthem) has not admitted wrongdoing, and the claims are pending adjudication.

Sources: KFF Health News, Medicare Advocacy

Blocked Cigna Merger and Cross-Litigation (2015–2020)

Who: U.S. DOJ Antitrust Division and 11 states (vs. Anthem & Cigna); then Cigna Corp. vs. Anthem, Inc.

What: In 2015, Anthem agreed to acquire rival Cigna for $54 billion, a deal that would form the nation’s largest insurer. The DOJ and multiple states sued in 2016 to block the merger on antitrust grounds. A federal judge ruled against the merger, citing likely higher prices, and in April 2017 a U.S. appeals court upheld the merger block. The deal collapsed amid mutual recriminations. Subsequently, the insurers turned on each other: Cigna sought a $1.85 billion termination fee plus ~$13 billion in damages, while Anthem counter-sued for over $20 billion alleging Cigna sabotaged the deal. After a bitter trial, Delaware’s Chancery Court in August 2020 refused to award either side damages – ruling that “each party must bear its own losses” from the failed merger. Cigna’s bid to collect the breakup fee was also denied. In 2021, the Delaware Supreme Court affirmed that Cigna gets no termination fee.

When: Merger announced 2015; litigation 2016–2017 (antitrust case) and 2017–2020 (Anthem–Cigna suits); final court decisions by 2020 (Chancery) and 2021 (appeal).

Financial Implications: Avoided a $54B merger. Each company absorbed litigation costs and lost expected merger synergies. (Anthem had claimed the blocked deal cost it $20+ billion in missed benefits.) Cigna was denied the $1.85B fee it sought.

Status: Resolved. The merger was permanently scuttled, and all related lawsuits concluded with no damages awarded.

Sources: Reuters, Shearman & Sterling, Richards Layton & Finger

Emergency Room Coverage Policy Lawsuit (2018)

Who: American College of Emergency Physicians & Medical Association of Georgia vs. Anthem Blue Cross (Georgia).

What: In mid-2017, Anthem instituted a policy to retroactively deny coverage for ER visits it deemed “non-emergencies” after review. This led to patients facing surprise bills for ER care. Emergency physicians sued in federal court (Atlanta) in July 2018, arguing Anthem’s policy violated the “prudent layperson” standard in state and federal law. The suit claimed Anthem’s post hoc denials—determining coverage based on final diagnosis rather than presenting symptoms—were unlawful and discouraged patients from seeking needed emergency care. Physicians reported that patients and providers were “operating in fear” that necessary ER visits would not be paid for. The lawsuit sought to halt the denial policy and force Anthem to cover the disputed claims. Lawmakers, including two U.S. Senators, also criticized Anthem, and regulators were asked to investigate.

When: Policy launched in 2017; lawsuit filed July 17, 2018. Anthem rolled back or loosened the program in late 2018 amid public pressure.

Financial Implications: The contested ER claims numbered in the thousands; one Indiana arbitration found 60–70% of ER claims were being downcoded or denied under similar protocols. Anthem’s liability could include paying those claims. In reputational terms, Anthem faced regulatory scrutiny that could carry fines.

Status: Partially resolved. Anthem adjusted its ER review policy by 2019, stating it would better adhere to prudent-layperson standards. The Georgia physicians’ suit was essentially mooted by these changes and parallel legal victories elsewhere (e.g., a 2022 arbitration ordered Anthem to stop using lists of diagnostic codes to deny ER claims automatically).

Sources: Insurance Journal, Indianapolis Business Journal

Provider Dispute – ER Billing Arbitration (2017–2022)

Who: Eleven Indiana hospitals vs. Anthem (Indiana) – dispute went to arbitration.



What: Anthem’s effort to curb “unnecessary” ER use also led to conflict with hospitals. In Indiana, Anthem’s Medicaid plan implemented an “AutoPay” algorithm in 2017 that paid only a small triage fee ($50–$70) for ER visits that didn’t match a list of approved emergency diagnoses, unless the hospital later submitted records to justify it. Hospitals argued this practice violated federal law (EMTALA) and their contracts. They claimed 60–70% of their ER claims (2017–2020) were downgraded or denied by Anthem’s system. The dispute went to arbitration. In early 2022, the arbitrator ruled in the hospitals’ favor, ordering Anthem to pay $4.5 million in damages and cease using its diagnostic code list to automatically reduce or deny ER claims. The ruling also compelled Anthem to reprocess and pay the affected claims in full (a sum the hospitals estimate exceeds $12 million).

When: Policy in effect 2017–2020; arbitration filed 2020; decision April 2022 (public via court filings).

Financial Implications: $4.5 million paid to hospitals, plus potentially >$12 million in additional reimbursements. Anthem also incurred legal costs and abandoned its auto-denial system.

Status: Resolved/Ongoing. Anthem complied with the $4.5M award and ended automatic downgrades in Indiana. As of 2022, hospitals continued pursuing back payments beyond the initial sample. The outcome has influenced ER billing practices in other states.

Sources: Indianapolis Business Journal

Blue Cross Blue Shield Antitrust Class Action (Subscriber Settlement)

Who: A class of Blue Cross/Blue Shield plan subscribers (individuals and employers) vs. Blue Cross Blue Shield Association and 36 BCBS companies (including Anthem).

What: A massive antitrust lawsuit filed in 2012 alleged that all BCBS insurers conspired to divide markets and avoid competition, violating antitrust laws. Anthem, the most prominent BCBS member, was a key defendant. Plaintiffs claimed the Blues’ agreements to limit operations (e.g., exclusive territories) led to higher premiums. In October 2020, the parties reached a landmark settlement. The Blues agreed to pay $2.67 billion in damages and to loosen future competitive restrictions. Anthem’s share of the payment was significant—around $594 million. The settlement also allowed large employers to solicit bids from multiple BCBS carriers, enhancing market competition. Final approval was granted in July 2022.

When: Suit filed 2012; settlement announced October 16, 2020; final approval July 2022.

Financial Implications: $2.67 billion paid by BCBS defendants (Anthem ≈ $594M). Anthem had reserved this payout in 2020 to mitigate future risk and support strategic planning.

Status: Resolved. Settlement funds are being distributed, and competitive reforms are being implemented across BCBS companies.

Sources: Fierce Healthcare, BCBS Settlement FAQ

Express Scripts PBM Contract Lawsuit (2016–2023)

Who: Anthem, Inc. (Elevance) vs. Express Scripts, Inc. (pharmacy benefit manager now owned by Cigna).

What: Anthem sued its then-PBM Express Scripts in March 2016, accusing ESI of breach of contract. Anthem had a 10-year deal (2009–2019) under which Express Scripts managed its pharmacy benefits. Anthem alleged ESI failed to pass along competitive savings and “refused to negotiate in good faith” on drug pricing, resulting in exorbitant costs for Anthem and its members. Anthem sought $14.8 billion in damages—the amount it claimed ESI overcharged for the contract. Express Scripts denied wrongdoing and counterclaimed, asserting Anthem was trying to renegotiate a fixed contract. In March 2023, a federal judge dismissed Anthem’s core claim, ruling it hadn’t proven it would have saved the $14.8B. A secondary reimbursement claim remained. By November 2023, the parties had settled those remaining claims confidentially. Anthem has indicated it will appeal the $14.8B dismissal.

When: Filed March 2016; partial summary judgment March 2023; settlement of residual issues November 13, 2023.

Financial Implications: Anthem had hoped to recover $14.8B. To date, it has recovered nothing. Both parties incurred high legal costs. The final settlement terms were not disclosed. Anthem’s 2023 appeal could revive the multibillion-dollar claim.

Status: Mostly resolved, with appeal pending. Trial court litigation is closed. Anthem is appealing to the 2nd Circuit to reinstate its central claim.

Sources: Reuters

Mental Health Coverage Class Action (2020–2025)

Who: A class of patients (ERISA health plan members) vs. Anthem, Inc. (Elevance).

What: A class-action lawsuit filed in 2020 (E.D.N.Y., Collins et al. v. Anthem) alleged Anthem improperly denied claims for residential mental health and substance abuse treatment using overly restrictive medical necessity criteria. Plaintiffs argued Anthem’s review policies—based on its own “Clinical UM Guidelines” and MCG—were far stricter than accepted standards, violating the Mental Health Parity and Addiction Equity Act and ERISA duties. After five years of litigation, Anthem agreed to a $12.875 million settlement in late 2025. Class members (denied care between 2017 and 2025) can seek reimbursement or opt for a flat $100 payment. Anthem also agreed to update its behavioral health criteria.

When: Class period 2017–2025; settlement reached and preliminarily approved in 2025 - final approval hearing scheduled for January 2026.

Financial Implications: $12.875 million payout fund for patients, plus likely ongoing compliance and policy update costs for Anthem.

Status: Pending final approval. Notices were sent to thousands of members in 2025. Final court approval is expected in early 2026. Anthem did not admit wrongdoing.

Sources: Top Class Actions, The Kennedy Forum

Ongoing Summary

As an FWA expert, PCG Software remains committed to updating this article on any and all Anthem/Elevance-related FWA or lawsuits so that you can keep abreast of all its legal dealings to ensure your organization, your patients, and your practice are safe. Subscribe to our blog for updates.