US judge approves $2.8 billion Blue Cross settlement with health providers

By Mike Scarcella and David Thomas

Aug 19 (Reuters) - A U.S. judge in Alabama on Tuesday granted final approval to a class action settlement requiring insurer Blue Cross Blue Shield to pay $2.8 billion to resolve claims by hospitals, physicians and other health professionals that they were underpaid for reimbursements.

The settlement, approved in a ruling by Chief U.S. District Judge R. David Proctor, will be shared among as many as 3 million potential class members. It also requires Blue Cross to adopt and implement changes that health providers contend will spur market competition and improve their ability to recover payments for their services.

The providers valued that part of the settlement at more than $17 billion.

Blue Cross said in a statement that it was pleased the settlement was approved and that it remained focused on "improving access to high-quality, equitable and affordable health care for the people and communities we serve."

The providers' lawyers, led by Joe Whatley and Edith Kallas of Whatley Kallas, in an email called the settlement approval "an outstanding result for the class."

Blue Cross had denied any wrongdoing in agreeing to the settlement.

Hospitals and other health providers claimed Blue Cross and some of its affiliates violated antitrust law by dividing the country into exclusive areas where they agreed not to compete with each other.

The lawsuit, filed in 2012, said the alleged conspiracy increased the cost of insurance and drove down reimbursements.

The settlement requires Blue Cross to create a cloud-based platform for verifying claims eligibility and tracking. The settlement will also give providers more contracting opportunities with Blue Cross.

Proctor overruled several challenges to the settlement, which was first announced last year and which follows a related $2.7 billion accord between Blue Cross and insurance subscribers.

Proctor on Tuesday also approved a fee request from the providers' lawyers for $657.1 million, representing 23.47% of the $2.8 billion settlement fund, as well as at least $102 million in expenses.

Blue Cross is battling related antitrust claims from hospitals that opted to sue directly and not participate in the settlement.

The plaintiffs for the class members said the number of opt-outs represented less than 1% of the class.

The case is In re: Blue Cross Blue Shield Antitrust Litigation, U.S. District Court for the Northern District of Alabama, No. 2:13-cv-20000.

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