Blue Cross Blue Shield (BCBS) has agreed to pay $2.8 billion to settle an antitrust class action lawsuit brought against it by hospital systems, physicians, and health providers. The plaintiffs claimed that they were underpaid for services and reimbursements, as stated in an Alabama federal court filing on Monday.
This settlement marks the largest ever in a healthcare antitrust case, the healthcare providers stated in the motion for preliminary approval, Bloomberg Law reported. It also shared a copy of the motion that was submitted in court.
In addition to the financial settlement, the agreement includes significant operational changes aimed at enhancing transparency and improving the efficiency of BCBS's claims processing system.
While Blue Cross agreed to the settlement, it denied the allegations. The insurer said it agreed to settle and implement operational changes to "put years of litigation behind us."
According to the lead counsels of the providers, Joe Whatley and Edith Kallas, the proposed settlement would transform the BlueCard program, which allows providers to submit claims to the insurer, Reuters reported.
The settlement still needs to be approved by U.S. District Judge R. David Proctor.
The healthcare providers sued the insurer in 2012, claiming that Blue Cross and its affiliates were dividing the country into exclusive service areas, thereby hindering competition. This arrangement led to an increase in the cost of insurance and financial losses for healthcare providers.
According to the attorneys, under the proposed settlement, Blue Cross will create a system-wide information platform, which would enhance member benefits, claims tracking, and eligibility verification. This will lead to better efficiency, accountability, and transparency.
The arrangement will also give healthcare providers more opportunities to negotiate contracts with BCBC plans. Blue Cross will spend hundreds of millions of dollars to implement these non-monetary changes as of the settlement, the filing said.
The settlement covers U.S. healthcare service providers, including some doctors and hospitals, with Blue plan patients between July 2008 and October 2024.
Regarding legal fees, the attorneys said that they would be asking for $700 million from Blue Cross.
In 2020, Blue Cross agreed to pay $2.7 billion to settle antitrust claims from individual as well as commercial subscribers. The deal was upheld by the Supreme Court in June.
