Blue Cross Blue Shield Settles Antitrust Class-Action for $2.8 Billion with Health Providers
In a landmark settlement, Blue Cross Blue Shield has agreed to pay $2.8 billion to resolve antitrust claims by hospital systems, physicians, and other health providers. This significant victory for healthcare providers, represented in Alabama federal court, marks a turning point in the industry, shedding light on the alleged underpayment of reimbursements.
Largest Healthcare Antitrust Settlement in U.S. History
The $2.8 billion settlement is the largest ever recorded in a healthcare antitrust case. Plaintiffs argued that Blue Cross Blue Shield and its affiliates divided the country into exclusive service areas, limiting competition, driving up insurance costs, and reducing reimbursement rates for providers. Blue Cross Blue Shield, while denying the allegations, agreed to the settlement to avoid prolonged litigation.
Changes to the BlueCard Program
As part of the settlement, significant operational changes will be made, particularly to the BlueCard program. Joe Whatley and Edith Kallas, lead attorneys for the plaintiffs, stated that the agreement will “transform” how providers submit claims, increasing transparency, efficiency, and accountability. The new system-wide information platform will streamline member benefits, eligibility verification, and claims tracking, making the process more efficient for providers.
Operational and Financial Impact
In addition to the financial compensation, Blue Cross will invest hundreds of millions of dollars into non-monetary improvements. These enhancements are expected to increase healthcare providers’ ability to contract with the insurer. The settlement covers healthcare providers who worked with Blue Plan patients between July 2008 and October 2024.
Legal Fees and Future Ramifications
Attorneys representing the healthcare providers have indicated they will seek up to $700 million in legal fees from Blue Cross Blue Shield. This settlement follows a related agreement in 2020, where Blue Cross paid $2.7 billion to resolve antitrust claims from commercial and individual subscribers, a deal upheld by the U.S. Supreme Court.
Louisiana Case: Another Major Verdict
In a separate but related case, a Louisiana state civil court jury ordered Blue Cross Blue Shield of Louisiana to pay over $400 million for underpaying claims at a New Orleans surgery center that specializes in cancer treatments. The insurer has announced plans to appeal the verdict.
The $2.8 billion settlement with healthcare providers is not just a financial transaction but a landmark moment in healthcare litigation. It sets a precedent for resolving antitrust disputes and signals a shift towards greater accountability and transparency in healthcare reimbursements as Blue Cross Blue Shield moves to implement these changes.