11th Circuit affirms $2.67B Blue Cross antitrust settlement

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Update:

• The 11th Circuit affirmed a $2.67 billion settlement agreement made to resolve claims health insurer Blue Cross Blue Shield engaged in anticompetitive practices. 
• A federal court in Alabama previously signed off on the settlement agreement. 
• Several class members argued the settlement agreement did not compensate them enough given the alleged antitrust violations. 
• Home Depot, Topographic Inc., Employee Services Inc. and several individuals objected to the settlement. 
• Blue Cross had been accused of dividing the United States into service areas and limiting competition among its members and outside insurers as a way to allegedly drive up costs for its own health insurance subscribers. 

Blue Cross Blue Shield settlement payout overview: 

• Who: Plaintiffs who opted out of a prior $2.67 billion settlement filed a new class action lawsuit against Blue Cross Blue Shield. 
• Why: Plaintiffs argue the settlement agreement does not properly compensate them for the alleged antitrust violations Blue Cross Blue Shield committed.
• Where: The class action lawsuit was filed in Florida federal court.

(Oct. 1, 2021)

Litigants who opted out of a $2.67 billion Blue Cross Blue Shield settlement payout that ended allegations of Sherman Act violations have filed their own class action lawsuit in Florida federal court. 

Plaintiffs say the Blue Cross Blue Shield settlement payout doesn’t compensate them enough for the alleged violations, namely that the company used anticompetitive practices to drive up costs for its own health insurance subscribers. 

The settlement concluded a class action lawsuit filed in 2013 alleging that 36 Blue Cross Blue Shield (BCBS) organizations divided the country into service areas and limited competition between members and also from outside insurers. 

Those who opted out of the BCBS settlement say that, while they concur with the court’s ruling that BCBS conduct should be viewed using a “per se,” standard, the agreement does not adequately compensate them given the antitrust violations BCBS committed. 

“The plaintiffs have paid substantial sums directly to these entities in the form of inflated premiums, and they have paid substantial sums to third party medical providers as result of the defendants’ actions in the form of inflated deductibles, co-pays, and other expenses,” states the class action lawsuit. 

A “per se,” standard of review dictates that innately anti-competitive behavior is illegal, regardless of any possible marketplace justifications, according to Law360.  

The agreement also stipulates that, among other things, BCBS must end its “National Best Efforts Pact,” which requires members to obtain a minimum of two-thirds of their revenues from Blue-branded services, regardless of possible available alternatives.

Blue Cross Blue Shield settlement payout, terms not sufficient, according to objectors

Plaintiffs who opted out of the settlement agreement claim it does not go far enough to stop BCBS from engaging in poor conduct. 

“The defendants have engaged and are still engaging in per se illegal market division and per se illegal output restrictions,” states the class action lawsuit. “The plaintiffs seek to enjoin an ongoing conspiracy between and among the BCBSA and the Blue Plans to allocate markets and impose output restrictions in violation of the prohibitions of the Sherman Act.”

Plaintiffs are demanding a jury trial and requesting any legal or equitable relief the court deems just and proper, in addition to the court enjoining BCBS from engaging in antitrust and anti-competitive behavior.

Do you agree that the $2.67 billion settlement is not proper compensation for Blue Cross Blue Shield’s alleged antitrust violations? Let us know in the comments.

The plaintiffs are represented by Michael Gulisano of Gulisano Law PLLC. 

The Blue Cross Blue Shield settlement payout class action lawsuit is Hoover, et al. v. Blue Cross And Blue Shield Association, et al., Case No. 1:21-cv-23448, in the U.S. District Court for the Southern District of Florida.

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