An Alabama court has recently approved a $2.8 billion settlement in a class action lawsuit alleging that the Blue Cross Blue Shield Association violated federal antitrust laws, resulting in lower reimbursement rates for healthcare facilities and providers. After deduction of attorneys’ fees and costs (estimated to be approximately $900 million), the remaining settlement funds will be paid to healthcare facilities and providers that elect to stay in the class. Healthcare facilities and providers that had patients with a BCBS plan may elect to remain in the class and receive compensation or choose to opt-out and pursue their own claims against BCBS.
Applicable providers will be included in the class and subject to the settlement agreement unless they affirmatively elect to opt out of the settlement on or before MARCH 4, 2025. If a provider elects to remain in the class and share in the settlement funds, it must affirmatively file a claim for payment on or before JULY 29, 2025.
Providers that elect to stay in the class and share in the settlement proceeds will be bound by the settlement agreement and forfeit any right to directly sue BCBS for the anticompetitive conduct alleged in the lawsuit. Conversely, providers that opt out will give up the right to the settlement proceeds and injunctive relief included in the settlement, as described below, but will retain the right to sue BCBS for the alleged anticompetitive behavior, either individually or by joining with other potential plaintiffs in a class action suit.
Providers should consider the following factors when deciding whether to remain in the class or opt out:
- Remaining in the class will result in access to some payment without any significant additional time commitment or expense, but that payment may be less than could be achieved in separate litigation
- Remaining in the class will also grant providers access to the payment reforms included in the settlement agreement
- Opting out and separately litigating claims will be subject to risks inherent in all litigation, including required investments of considerable resources by providers, potentially years of litigation before the matter is resolved, and risks of a materially different outcome than that offered by the settlement agreement
- Opting out will also be subject to potentially greater recoveries, as the settlement only covers a fraction of the actual value of the BCBS claims during the relevant period
In addition to the monetary settlement, the settlement agreement provides for certain injunctive relief, including:
- Oversight of BCBS plans and the Association by a Monitoring Committee for five years
- Clean claims not timely paid will accrue 8% annual interest
- Changes will be implemented to improve communication and response times and pre-authorizations standards.
Providers who remain in the class must affirmatively file a claim to share in the settlement on or before July 29, 2025. There are two methods for calculating a claim for a healthcare facility. The default method is based on claims information from 2008-2014 introduced in the litigation by the plaintiffs’ experts, with additional extrapolated amounts for 2015-2024 using growth in national hospital expenditures. This method will only provide recovery for facility provider numbers/NPIs in existence in 2008. Providers with new or additional NPIs since 2008 will likely receive a significantly higher amount by using the alternative method and submitting its own claims data. Claims can be submitted online at http://www.BCBSprovidersettlement.com.
Our Firm is happy to discuss your options in more depth. We can also put you in touch with a financial company interested in exploring ways it can help healthcare facilities with cash flow in connection with either participation in the settlement agreement or opting out, which may include upfront payments and a share of ultimate proceeds.
Prior to the March 4 deadline, we recommend that a facility calculate the value of its allowed claims against BCBS (including the patient portion) during the settlement claims period (July 24, 2008 – Oct. 4, 2024). This will help it determine its potential recovery under the settlement and the maximum recovery possible should it decide to opt out and pursue a separate claim. Please contact Elizabeth Dalton or Karen Rieger if you would like our assistance in your analysis of your options.