The judge approved the $2.8B settlement for BCBS. Why some providers choose

For more than a decade, the judge approved a historic $2.8 billion class action solution involving the Blue Cross Blue Shield — but for some providers, that's not enough.

The solution was to resolve a lawsuit filed in 2012, in which the provider and hospital claimed that Blue Cross and its affiliate programs paid for the lawsuit. The provider claims that the Blue Cross violated antitrust laws by dividing the United States into “area of ​​services” and agreeing not to compete in these areas. They also argue that insurance companies serve them with fixed prices.

Guillermo Beades, a partner in the health care litigation division of Frier Levitt, said the plaintiffs claimed that the Blue Cross reduced reimbursement by colluding in different states to pay a certain amount of service.

The $2.8 billion settlement will be distributed among approximately 3 million class action members. It is the largest settlement in health care cases.

In a statement to Medcity News, the insurer said, “is satisfied with the court's order to approve the settlement we reached for a resolution to resolve the claim.”

While Blue Cross Blue Shield is happy with the settlement, many providers do not. About 6,500 providers opted out of the settlement. Dozens of people have also filed lawsuits against insurers, including large health systems such as Providence, Commonspirit Health, WellSpan and Bon Secours Mercy Health.

A Providence spokesman told Medcity News it decided to opt out of settlement because it did not reflect the scale of anti-competitive damages Blue Cross would encounter.

A spokesman who declined to be named said: “Our estimated losses are many times higher than the compensation offered by the class solution, so we are making separate claims. We want to end all the anti-competitive and harmful behavior of the Blues.”

Medcity News has contacted many other health systems and they declined to comment or responded.

Solution

The $2.8 billion settlement was approved by U.S. Chief District Judge R. David Proctor in Alabama. The judge's ruling said that in addition to payments to class action members, the settlement also requires injunctive relief to resolve the provider issues at the “litigation core.”

For example, it requires changes to the Blue Card system, which allows members of one blue cross to receive medical services while traveling or residing in another blue cross program area. When providers treat members of another Blue Cross program, they must submit their claims through the Blue Card system.

“For decades, providers have complained that despite positive effects, Blue Card is a non-transparent program that results in additional costs, inefficiency and frustration,” the judge said. “The injunctive relief of the settlement will significantly improve providers’ experience in Blue Card systems, increase transparency and efficiency, and lead to accountability for Blue Programs.”

Some changes to the Blue Card program include the creation of a cloud-based system that provides better access to member benefits and qualification verification information and pre-authorization requirements. It also requires each blue plan to pay for cleaning (meaning no errors), get a fully insured claim within 30 days, and appoint a dedicated blue card executive responsible for overseeing the operation of the plan.

In addition, providers will have more opportunities to enter into value-based contracts with the Blue Cross program, the decision said.

To ensure compliance, the Monitoring Committee will also oversee the implementation of the agreement for five years. The committee will review the new rules proposed by the Blue Cross and resolve disputes related to the terms of the settlement.

Why the provider opt out

On the surface, a $2.8 billion settlement may sound like a lot of money.

But for the health system’s annual revenues reaching hundreds of billions of dollars, “this is a drop in the bucket.”

“First of all, you have to pay the attorneys' fees from it,” he said. “The most important thing is that you will have the same share. This is not Pro Rata, the same among 3 million participants. So if you choose to go in, you won't make that much money. If you are a large group, they have millions of dollars in claims that are not enough.

Bead added that he was not satisfied with the non-monetary terms of the solution. Some providers do not believe that these reforms are sufficient to change the structure that allows anti-competitive behavior in the first place.

Ultimately, providers want more transparency, Bead says.

“They want to know that there are enough measures and balances to avoid this happening, because if you look at the historical lawsuit against large systems (UnitedHealthCare, Horizon) and just like every five to ten years, you'll see one of them gets stuck here for hundreds of millions of dollars,” he said. “That doesn't stop them. They're going to do what they do again in five to eight years.”

Meanwhile, Providence wants fair compensation for Blue Cross misconduct, including “payment and restrictions affect Providence’s ability to effectively, competitively and continue to provide critical services to underserved communities,” a spokesperson said.

The spokesman added that the health system wanted to hold insurers accountable and obtained a resolution that “reflects the true extent of harm suffered by our organizations and the communities we serve.”

In complaints filed by multiple health systems in March, plaintiffs called for a permanent ban on Bruce's plan to sign an agreement that determines prices or damages competition. They also want to receive compensation for “three times the amount of damages suffered by the plaintiff.”

Photo: Valerii Evlakhov, Getty Images