Blue Cross Blue Shield To Pay Largest Settlement in U.S. Antitrust Health Care History: $2.8 Billion

Forcing health insurance companies to do the right thing for patients and their doctors takes time, often many years, whether through changes in public policy, the marketplace, or litigation. So hats off today to the attorneys who spent a dozen years and millions of dollars moving an antitrust lawsuit against Blue Cross and Blue Shield plans forward. Their tenacity has paid off. Big time. 

The nation’s Blues plans and their PR and lobbying group, the Blue Cross Blue Shield Association (BCBSA), agreed this week to the largest settlement in U.S. antitrust health care history. If approved by a federal judge in Alabama – and there is every indication he will – the Blues will pay $2.8 billion to resolve allegations that they collaborated to cheat physician groups, hospitals and other health care providers in a way that increased both their profits and the overall cost of health care.  

This monumental settlement, in the making since 2012, also commits the Blues to allocate an additional $500 million to change their business practices, especially with regards to a controversial “BlueCard” program at the heart of the litigation. 

BCBSA agreed to the settlement four years ago but it also required approval of the boards of all the Blue Cross Blue Shield companies across the country, including those that are part of Elevance (previously known as Anthem Inc.) and Health Care Services Corp., both of which own and operate many of the plans. Elevance, whose shares are traded on the New York Stock Exchange, had a lousy day on Wall Street yesterday. Its shares lost nearly 5% of their value after the settlement was announced.

The anti-trust claims allege that the insurers conspired and carved up the country in a way that assured the Blues plans would not have to compete with each other, which the plaintiffs contend increased premiums and out-of-pocket requirements and created administrative burdens and costs for doctors and other health care providers. 

By settling as they have, the Blues plans will have to shell out a ton of money to pay the doctors and hospitals across the country they shortchanged but still be able to claim they didn’t do anything wrong. I loved the statement a BCBSA spokesman sent to the media because it took me back to the days when I used to write similar face-saving statements to try to diminish the significance of a settlement and appease my company’s top brass and lawyers. 

“We deny the allegations made in the lawsuit,” the spokesman’s statement said. ”However, to reach a settlement and put years of litigation behind us, we have agreed to make some operational changes and a monetary payment to the provider class involved in the case.”

In the days and weeks ahead, we’ll explain how the Blues plans pulled off their scheme and how they benefited from it as they allegedly ripped off their customers and the nation’s health care providers.