Blue Cross Blue Shield (BCBS) has reached a landmark agreement to pay $2.8 billion to settle antitrust class-action lawsuits brought by hospital systems, physicians, and other healthcare providers who allege they were underpaid for reimbursements. This settlement, filed recently in a federal court in Alabama, marks the largest ever in a healthcare antitrust case.
While BCBS denied the allegations against it, the company stated that it opted for the settlement to move forward and “put years of litigation behind us.”
Lead attorneys for the plaintiffs, Joe Whatley and Edith Kallas, highlighted that the proposed settlement would significantly transform the BlueCard program, which is used by providers to submit claims. The agreement is pending approval from U.S. District Judge R. David Proctor.
The lawsuit originated in 2012 when healthcare providers accused BCBS and its affiliates of dividing the United States into exclusive territories, thereby limiting competition. The plaintiffs argued that this nationwide conspiracy led to higher insurance costs and reduced reimbursement rates for medical services.
As part of the settlement, BCBS will implement a system-wide information platform aimed at improving member benefits, verifying eligibility, and tracking claims. This initiative is expected to enhance transparency, efficiency, and accountability within the organization. Furthermore, the settlement will create more contracting opportunities for providers with BCBS.
The insurer is also committing hundreds of millions of dollars to the non-monetary components of the settlement. This agreement will cover healthcare service providers, including hospitals and certain physicians, who served Blue plan patients from July 2008 to October 2024.
In addition, the attorneys representing the plaintiffs plan to request up to $700 million in legal fees from BCBS.
This settlement follows a previous agreement in 2020, where BCBS settled related antitrust claims for $2.7 billion with commercial and individual subscribers, a deal that was upheld by the U.S. Supreme Court in June.
In a separate case, Louisiana's Blue Cross Blue Shield was recently ordered by a state civil court jury to pay over $400 million after it was found to have underpaid claims to a New Orleans surgery center that frequently serves cancer patients. BCBS has announced its intention to appeal this verdict in hopes of reducing or overturning the penalty.
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