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Federal Appeals Court Upholds $2.7 Billion Blue Cross Blue Shield Antitrust Settlement

By  |  October 29, 2023
Blue Cross Blue Shield insurers

The Eleventh Circuit Court has affirmed a nearly $2.7 billion antitrust settlement involving Blue Cross Blue Shield insurers. This decision, outlined in a PDF opinion released earlier this week, upholds a ruling from the Alabama district court in 2022.

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    The ruling clears the path for the distribution of these funds, while also bringing an end to a protracted legal battle arising from a class-action lawsuit. This lawsuit alleged that major Blue Cross Blue Shield plans had engaged in territorial allocation to evade competition, per Reuters.

    The Blue Cross Blue Shield Association had agreed to the settlement back in 2020, and other parties subsequently followed suit. Notably, Home Depot, a significant employer, challenged the Alabama ruling. Their argument was that allowing the ruling to stand could potentially hinder future antitrust efforts against the Blue Cross Blue Shield system.

    However, the court ultimately disagreed with Home Depot’s concerns. It clarified that although the settlement includes a release preventing future class-action claims against Blue Cross plans, it does not obstruct the federal government from pursuing antitrust actions against a Blue Cross plan. The court’s statement emphasized this point: “The release in this appeal is limited and affects the rights of only some private individuals to sue Blue Cross, and it does not affect public enforcement of the antitrust laws.”

    Related: Ford Motor Brings Antitrust Suit Against Blue Cross Blue Shield

    The court further stated, “The settlement agreement does not bar the Department of Justice or state attorneys general from pursuing civil claims or criminal charges against Blue Cross. Home Depot’s concern that the release will undermine the enforcement of the antitrust laws is overstated.”

    Another appeal was brought forth by Topographic and Employee Services, two consultancies, who raised concerns about the settlement’s classification of the class into two groups. One group primarily comprised self-funded clients, while the other consisted of fully insured firms. As per the existing arrangement, the majority of the settlement would be allocated to fully insured plan sponsors.

    While acknowledging that this allocation approach was uneven, the court found that it did not constitute unfair treatment. The court noted, “The self-funded claimants were represented by their own counsel and class representatives in the settlement negotiations and received some compensation from the settlement. Although the settlement agreement’s allocation is facially unequal, it is not facially unfair.”

    Source: Reuters