Blue Cross Blue Shield settles US health provider class action for $2.8 billion

6:55 pm Monday, October 14th, 2024

By Mike Scarcella

(Reuters) -Insurer Blue Cross Blue Shield has agreed to pay $2.8 billion to resolve antitrust class action claims by hospital systems, physicians and other health providers alleging they were underpaid for reimbursements, the plaintiffs said in an Alabama federal court filing on Monday.

The settlement is the largest ever for a healthcare antitrust case, they added.

Blue Cross Blue Shield denied the allegations in a statement, but said it agreed to the settlement and make operational changes to “put years of litigation behind us.”

The providers’ lead attorneys, Joe Whatley and Edith Kallas, said in a statement the proposed settlement would “transform” the BlueCard program through which providers submit claims.

The agreement is subject to approval from U.S. District Judge R. David Proctor.

The health providers first sued in 2012, claiming Blue Cross and its affiliates divided the country into exclusive areas where they did not compete with each other. The lawsuit said the nationwide conspiracy increased the cost of insurance and drove down reimbursements.

Under the settlement, Blue Cross will create a system-wide information platform facilitating member benefits, eligibility verification and claims tracking that the attorneys said would lead to more transparency, efficiency and accountability.

The settlement will also give providers more contracting opportunities with Blue Cross.

Blue Cross will spend hundreds of millions of dollars implementing the non-monetary part of the settlement, the filing said.

The settlement covers U.S. healthcare service providers, including hospitals and some doctors, with Blue plan patients between July 2008 and October 2024.

The lawyers said they would ask for up to $700 million in legal fees from Blue Cross.

Blue Cross agreed in 2020 to pay $2.7 billion to resolve related antitrust claims from commercial and individual subscribers. The U.S. Supreme Court upheld that deal in June.

(Reporting by Mike ScarcellaEditing by David Bario and Richard Chang)