Healthcare Providers Sue BCBS Insurers Over Alleged Collusion

A new wave of lawsuits has been filed against Blue Cross Blue Shield (BCBS) insurers, with healthcare providers claiming that the insurance plans colluded to suppress competition and reimburse them at lower rates. According to Fierce Healthcare, these legal actions bypass a previously proposed $2.8 billion settlement and instead push for a jury trial.

The lawsuits, filed in multiple states, name the Blue Cross Blue Shield Association along with 33 of its affiliated insurers. Providers involved in the filings include the University of Pennsylvania Health System, Geisinger, MedStar, CommonSpirit, and physician staffing firm TeamHealth. They argue that the Blues’ alleged coordination violated antitrust laws, restricting competition in the purchase of healthcare services. One complaint filed in Pennsylvania states that “Defendants colluded for decades to restrict competition for the purchase of healthcare services” and that this resulted in suppressed reimbursement rates for providers.

The legal dispute is part of a broader battle that has been ongoing for more than a decade. Per Fierce Healthcare, providers contend that BCBS insurers divided geographic territories among themselves to limit direct competition, a practice that they claim led to increased insurance costs and lower payments to healthcare providers.

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The lawsuits follow an October settlement in Alabama court, where BCBS insurers tentatively agreed to a $2.8 billion resolution that also included changes to the BlueCard program. This program, designed to streamline claims processing and provider communication, was set to be moved to the cloud, with provisions ensuring timely payments with interest. However, providers now claim that little progress has been made toward meaningful reform.

According to Fierce Healthcare, this is not the first time BCBS has faced such allegations. In 2020, a similar $2.7 billion settlement was reached to resolve consumer-driven lawsuits. Despite this, healthcare providers assert that BCBS insurers have yet to demonstrate a genuine effort to increase competition in the marketplace.

In the Pennsylvania lawsuit, providers argue that they have not observed any substantial changes since 2021, with insurers continuing to avoid competing outside their designated regions. The complaint suggests that eliminating these alleged anti-competitive practices would result in higher provider reimbursement rates and a more competitive healthcare payment market.

Source: Fierce Healthcare