Alabama District Court Judge Preliminarily Approves Blue Cross Blue Shield $2.8 billion Antitrust Settlement
Judge R. David Proctor of the United States District Court for the Northern District of Alabama issued an Order granting preliminary approval for a $2.8 billion settlement between Blue Cross Blue Shield Association a proposed class of medical providers, which also includes a commitment from Blue Cross Blue Shield to “…..invest hundreds of millions of dollars in key infrastructure through which Blue Cross and Blue Shield Plans can work with healthcare providers…” revamping its claims systems to facilitate better interactions between members. Judge Proctor noted that the providers believe their $2.8 billion settlement deal represents the largest-ever recovery in an antitrust class action that did not result from a government investigation, saying that “without question, the settlement provides significant monetary relief.”
The settlement addresses ongoing allegations that the Blue Cross and Blue Shield policies restricted member companies from competing with one another. This new deal comes in addition to the 2020 $2.67 billion settlement Blue Cross and Blue Shield and its members reached with network subscribers involving the case Home Depot U.S.A., Inc. v. Blue Cross Blue Shield Association, et al.
The underlying multidistrict litigation traces back to 2013, when subscribers and healthcare providers alleged that Blue Cross and Blue Shield and its member plans colluded to divide the country into exclusive geographic service areas through a series of trademark licensing agreements and other arrangements, thereby violating the Sherman Act and other antitrust laws.
In the Order, Judge Proctor noted that the monetary recovery is only “part of the value of the Settlement.” The Order said, “Settlement class members will benefit from a comprehensive transformation of the BlueCard Program, saving administrative costs and improving their ability to recover payment for their services for years to come. The Blues will invest hundreds of millions of dollars to implement this transformation.” Essentially, the aim is to streamline billing processes when providers submit claims for patients enrolled in plans outside their local service areas, thanks to the BlueCard Program. The settlement also entails modifications to the rules governing contracts between providers and Blue Cross and Blue Shield.
Prior to the preliminary approval hearing, Non-Party Out-Of-Network Emergency Medicine Providers, who have their own ongoing litigation against Blue Cross Blue Shield, raised objections, claiming that out-of-network physician provider interests were insufficiently represented in the settlement discussions. However, Judge Proctor dismissed this objection, ruling that it was premature as settlement notices had yet to be distributed.
