Montgomery, Alabama: Dozens of U.S. hospital systems and healthcare providers have filed lawsuits against Blue Cross Blue Shield and its affiliates, alleging systematic underpayment amounting to billions of dollars. The lawsuits, filed on Tuesday in federal courts across California, Illinois, and Pennsylvania, mark a significant escalation in legal battles against the insurance giant.
These medical providers have chosen to opt out of a proposed $2.8 billion class-action settlement currently awaiting final approval in federal court in Alabama. The deadline to withdraw from the settlement was Tuesday, with the case set to go before Chief U.S. District Judge R. David Proctor in Birmingham for a final approval hearing on July 29.
Among the new plaintiffs are Bon Secours Mercy Health, Temple University Health, and the University of Pennsylvania Health System. These institutions have not yet responded to requests for comment regarding their decision to pursue individual litigation, which could potentially yield higher damages than the compensation offered in the class-action settlement.
Allegations of Market Manipulation and Underpayment
Both the class-action suit and the new lawsuits accuse Blue Cross and its affiliated entities of illegally dividing the U.S. into exclusive territories where they refrained from competing with one another. Plaintiffs argue that this alleged scheme violated antitrust laws, resulting in inflated insurance costs and suppressed reimbursement rates for healthcare providers.
“Defendants colluded for one reason: to pay healthcare providers, including plaintiffs, far less than they would have been paid in a competitive market,” Temple University and other plaintiffs alleged in their lawsuit filed in Philadelphia federal court.
Legal Responses and Ongoing Cases
Blue Cross has denied any wrongdoing in agreeing to the $2.8 billion settlement and declined to comment on the latest lawsuits.
Temple University’s case is being handled by the law firms Duane Morris and McKool Smith, which have yet to issue public statements on the matter. Additional law firms involved in the new wave of litigation include K&L Gates and Pearson Warshaw.
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Attorneys representing healthcare providers in the original class-action settlement have also not commented on the recent developments.
Previous Antitrust Settlements and Pending Lawsuits
This is not the first time Blue Cross has faced major antitrust claims. In 2020, the insurer agreed to a $2.7 billion settlement with commercial and individual policyholders who claimed they had been overcharged due to anti-competitive practices. That settlement was upheld by the U.S. Supreme Court last year.
Following that case, several major corporations opted to pursue separate lawsuits rather than accept settlement terms, and those cases remain ongoing.
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As litigation continues, the new lawsuits could have significant implications for the healthcare industry and insurance markets, potentially reshaping how major insurers negotiate payments with medical providers.
