Blue Cross Blue Shield settles $2.8 billion US health provider class action.
Insurer Blue Cross Blue Shield has consented to a payment of $2.8 billion to settle antitrust class action allegations brought forth by hospital systems, physicians, and other healthcare providers, who claimed they were inadequately compensated for reimbursements, as stated in a federal court filing in Alabama on Monday.
This settlement marks the largest in the history of healthcare antitrust cases, according to the plaintiffs. While Blue Cross Blue Shield refuted the allegations in a statement, it indicated its willingness to settle and implement operational changes to "move past years of litigation."
The lead attorneys for the providers, Joe Whatley and Edith Kallas (Whatley Kallas) remarked that the proposed settlement would "revolutionize" the BlueCard program utilized by providers for claim submissions. The agreement awaits approval from U.S. District Judge R. David Proctor. The healthcare providers initially filed their lawsuit in 2012, asserting that Blue Cross and its affiliates had divided the nation into exclusive territories, thereby avoiding competition.
The lawsuit contended that this nationwide conspiracy resulted in increased insurance costs and reduced reimbursements. As part of the settlement, Blue Cross will establish a comprehensive information platform that will enhance member benefits, eligibility verification, and claims tracking, which the attorneys believe will foster greater transparency, efficiency, and accountability. Additionally, the settlement will provide healthcare providers with increased contracting opportunities with Blue Cross.
Blue Cross provide health insurance in the United States to more than 115 million people and is expected to invest hundreds of millions of dollars to implement the non-monetary aspects of the settlement, as indicated in the filing. The settlement encompasses U.S. healthcare service providers, including hospitals and certain physicians, who treated Blue plan patients from July 2008 to October 2024. The attorneys have indicated they will seek up to $700 million in legal fees from Blue Cross. In 2020, Blue Cross agreed to pay $2.7 billion to resolve related antitrust claims from commercial and individual subscribers, a deal that was upheld by the U.S. Supreme Court in June.
“Over the past 12 years we have dedicated an extraordinary amount of time, tireless effort and resources to this historic outcome for providers,” said Co-Lead Counsel Edith Kallas, of Whatley Kallas. “Many important issues for providers are finally being addressed. We’re pleased that we have been able to achieve relief that will create a better system for healthcare providers and that will support the organizations and people we rely on to take care of us and our families every day.”
Co-Lead Counsel Joe Whatley added: “The $2.8 billion cash payment, together with the hundreds of millions of dollars in additional investments the Blues are making to improve their systems, will benefit providers enormously. We believe that the actual value to providers is much greater than the total payments.”
“For nearly two decades I have helped lead, through my role at HANYS, a multi-state group of hospital associations attempting to obtain meaningful reforms for hospitals and healthcare systems, including their doctors and ancillary providers, in the Blue Card Program. I have worked closely with Whatley Kallas to continue those efforts in this lawsuit and mediation. This settlement represents a culmination of these necessary, meaningful reforms and will significantly improve the Blue Card Program for all Class Members” said Jeff Gold, Vice President and Counsel for Managed Care and Insurance, Hospital Association of New York State.
Matthew Katz, who has served in various organized medicine roles for decades and is currently a consultant for healthcare providers added “I have spent much of my professional life assisting doctors, clinicians and other healthcare professionals in addressing ongoing issues in the Blues’ system. I have continued these efforts by assisting Whatley Kallas in the litigation and resolution of this lawsuit. The injunctive relief achieved here is transformative and will result in a more transparent, efficient and accountable experience for Class Members in dealing with the Blues.”
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