Blue Cross Blue Shield has agreed to a 2.8 billion dollar settlement to resolve antitrust class action claims filed by healthcare providers, including hospital systems and physicians, who alleged they were underpaid for reimbursements. The settlement, filed in an Alabama federal court, is the largest settlement ever in a healthcare antitrust case.

The lawsuit, initiated by healthcare providers in 2012, accused Blue Cross and its affiliates of dividing the United States into exclusive territories where they did not compete with each other. The plaintiffs argued that this arrangement artificially inflated insurance costs while simultaneously suppressing reimbursement rates for medical services. The providers claimed that Blue Cross’s actions led to a systemic underpayment, affecting their ability to deliver care and invest in medical advancements.

Although Blue Cross Blue Shield denied the allegations, the insurer agreed to the settlement in order to resolve the long-standing litigation and avoid further legal costs. In a statement, Blue Cross explained that it would also make operational changes designed to put an end to years of legal disputes.

The settlement is designed to provide a number of operational and financial benefits to the affected healthcare providers. Among the changes, Blue Cross will establish a new system-wide information platform that aims to streamline the process of verifying member benefits, tracking claims, and ensuring greater transparency in the reimbursement process. The platform is expected to improve efficiency and accountability within the BlueCard program, the network through which healthcare providers submit claims.

Additionally, Blue Cross will offer more contracting opportunities to healthcare providers, further enhancing their ability to work with the insurer. The company has pledged to invest hundreds of millions of dollars in the implementation of these non-monetary elements of the settlement.

The proposed settlement applies to U.S. healthcare providers, including hospitals and some physicians, who provided services to Blue Cross plan members between July 2008 and October 2024.

As part of the agreement, the providers’ legal team has indicated they will seek up to 700 million dollars in legal fees from Blue Cross.

This latest settlement follows a 2020 agreement in which Blue Cross agreed to pay 2.7 billion dollars to resolve related antitrust claims involving commercial and individual subscribers. That deal was upheld by the U.S. Supreme Court in June 2024.

The current settlement represents a major milestone in the ongoing efforts to address antitrust concerns in the healthcare industry, which continues to grapple with issues of pricing transparency and fair competition. If approved by U.S. District Judge R. David Proctor, it will bring an end to this protracted litigation, while setting the stage for future reforms in the way healthcare providers interact with insurers.