On October 14, 2024, a class of hospitals, physicians, and other health care providers (Provider Plaintiffs) reached a proposed $2.8 billion settlement of antitrust claims against the Blue Cross Blue Shield Association and other Blue Cross Blue Shield entities (collectively, BCBS). Though still pending court approval, the $2.8 billion settlement would be the largest ever settlement for a health care antitrust case.
Settlement Background
Provider Plaintiffs brought the lawsuit in 2012, arguing that BCBS and its member plans suppressed competition by, among other things, dividing the United States into exclusive service areas and implementing rules limiting revenue earned from non-BCBS plans. According to the Provider Plaintiffs, this conduct resulted in inflated insurance costs and reduced provider reimbursements.
The Settlement Fund
There are two main components of the settlement: (1) a $2.8 billion settlement fund to reimburse providers; and (2) a commitment from BCBS to make operational and structural improvements aimed at benefiting providers and preventing future anti-competitive conduct.
In order to be eligible for a distribution from the settlement fund, a physician, group practice, or facility must have treated BCBS patients between July 24, 2008, and October 4, 2024 (the Settlement Class Period). Moreover, the settlement fund will be broken out into two sub-funds: one for “health care facilities,” the other for “medical professionals.” These sub-funds will not be allocated equally.
According to Provider Plaintiffs’ allocation experts, BCBS’s anti-competitive practices impacted health care facilities — general acute-care hospitals, ambulatory surgery centers, outpatient facilities, and the like — 3.5 times more than they did medical professionals. Moreover, 65% of physicians released their claims in a similar suit earlier this year. Thus, the proposed settlement will distribute 92% of the settlement fund to health care facilities and 8% to medical professionals.
Though the exact formula for calculating a given claimant’s pro rata distribution will vary based on provider type and other variables, a claimant’s distribution from the settlement fund will generally depend on its (1) “allowed amounts,” meaning the amounts allowed by Blue Plans for Commercial Health Benefit Products during the Settlement Class Period; and (2) the relative effect of BCBS’s conduct on the given health care facility or medical professional compared to other health care facilities or medical professionals.
More details regarding a claimant’s settlement fund distribution, the deadline to opt out of the settlement class, and other related issues will be provided in the Class Notice — which will likely not be finalized and disseminated for another few months.
Other Relief
In addition to the reimbursement to providers, BCBS has agreed to also implement certain operational changes aimed at benefitting providers. Such changes include, among other things:
- The implementation of a system-wide, cloud-based architecture that will increase access to critical information for providers;
- The promulgation of guidance that improves prior authorization processes;
- The implementation of a real-time BCBS internal messaging system to reduce the time it takes for BCBS to respond to providers’ issues and disputes; and
- The development of a new appeals form common to all Blue Plans, so providers do not bear the administrative expense of complying with different Blue Plan requirements for initiating an appeal related to a BlueCard claim.
These infrastructure improvements will cost “hundreds of millions of dollars” to implement, according to BCBS.
Next Steps
The settlement is still pending court approval, and it may take weeks, perhaps months, before class notices are published and sent.
