On December 4th, the U.S. District Court in Alabama overseeing the Blue Cross Blue Shield antitrust litigation granted preliminary approval of the proposed settlement of the class action lawsuit. The $2.8 billion settlement from Blue Cross Blue Shield to health care providers who brought the suit resolves a 12-year antitrust lawsuit. Health care providers and purchasers alleged that Blue Cross Blue Shield companies violated antitrust laws agreeing not to compete with each other and to limit competition among themselves in selling health insurance and administrative services for health insurance. The class action litigation was split into two settlement processes – one for purchasers and another for health care providers.
Purchasers claimed that Blue Cross allocated geographic territories, limited member plans’ competition by mandating a minimum percentage of business under the Blue Cross brand for each member doing business inside and outside their territories, restricted the right of member plans to be sold to companies outside the Association, and agreed to other restraints on competition. [11th Circuit Court of Appeals at 4]
For the purchaser settlement, Blue Cross agreed to the following “structural changes” to address anticompetitive allegations:
- Elimination of the “National Best Efforts Requirement,” which restricted the member plans’ ability to market under other brands;
- Allowing member plans to submit competing bids that were previously prohibited;
- Restricting the application of the “Local Best Efforts Requirement,” which required each member plan to generate a certain percentage of its revenue within its geographic service area using the Blue Cross brand;
- Restricting the conditions that Blue Cross may place on acquisitions of member plans;
- Eliminating several restrictions that Blue Cross had placed on contracts between self- funded accounts and healthcare providers;
- Restricting Blue Cross’s ability to include “Most Favored Nation-Differential” clauses in contracts with providers; and
- Establishment of a monitoring committee to oversee compliance with the structural changes dictated by the agreement. The monitoring committee is charged with mediating certain disputes and reviewing certain rule changes that Blue Cross may make during the five- year monitoring period following approval of the settlement. [11th Circuit opinion at 7]
In the separate settlement process for health care providers, the “parties represent that the settlement will significantly improve how Providers will interact with the Blues, bringing more transparency and efficiency to their dealings, and increase Blue Plan accountability.” The settlement proposes the following relief sought by the health care providers:
- Transformation of the BlueCard Program infrastructure through the development and implementation of a system-wide, cloud-based architecture that will facilitate providers’ immediate access to member benefits and eligibility verification information, preauthorization requirements, and claims status tracking;
- BlueCard prompt pay commitment requires the Blues to pay clean, fully insured claims within thirty days, provide additional information to enable claims to be corrected promptly, and assesses penalties/interest on eligible claims not paid promptly; [Washington State already has “prompt pay” rules – WAC 284-170-431]
- Appointment of a BlueCard Executive at each Blue Plan;
- Implementation of a real-time Blues internal messaging system to reduce the time it takes for the Blues to communicate with each other regarding BlueCard issues; and
- Creation of a Blue National Executive Resolution Group to work to identify trends and opportunities for further improvement of the BlueCard Program. [District Court at 8]
The Monitoring Committee must be formed within fifteen business days of the effective date of settlement comprised of two members appointed by the Blues; two members appointed by provider’s counsel; and one member appointed by the Court.
Changes to the Blues system and contracting will occur over the next few years. For example, the Blues “shall implement a real-time inter-plan messaging service, which will enable Blue Plans to address Settlement Class Member and Member issues in near real-time, including by supplying prompt responses to pre-service transactions and rectifying claims issues and disputes. [Exhibit A Settlement Agreement filed 10/14/2024 at 38] These changes are intended to make it easier for providers to determine a patient’s benefits and coverage eligibility, along with prior-authorization procedures and requirements for a particular service. Other changes are designed to increase out-of-area contracting opportunities by allowing a health system’s facilities to contract with the same Blues plan as an “anchor hospital” within the organization. The facility must be in the same state and within an hour’s drive of the anchor hospital, which must be part of the settlement class.
Whatley Kallas, LLP—Co-Lead Counsel in the litigation presented the District Court with a PowerPoint Presentation describing the settlement available here.
