Logan Reid
Dozens of U.S. hospital systems and healthcare providers have filed lawsuits against Blue Cross Blue Shield (BCBS), alleging that the company has underpaid them by billions of dollars. The lawsuits, filed in federal courts in California, Illinois, and Pennsylvania, accuse BCBS and its affiliates of colluding to pay healthcare providers less than they would have been paid in a competitive market. This has sparked a debate about whether these lawsuits against BCBS by hospitals are a fraud. BCBS, on the other hand, has settled a separate antitrust lawsuit with commercial and individual subscribers, agreeing to a $2.7 billion settlement. The company also has resources and initiatives in place to combat healthcare fraud and protect its members.
| Characteristics | Values |
|---|---|
| Parties Involved | Blue Cross Blue Shield, Healthcare Providers, Plaintiffs' Co-Lead Counsel Blue Cross Blue Shield Settlement, Hausfeld LLP, Boies Schiller Flexner LLP, Duane Morris, McKool Smith, K&L Gates, Pearson Warshaw |
| Nature of Lawsuit | Antitrust Lawsuit, Allegations of Underpayment by Blue Cross Blue Shield |
| Settlement Amount | $2.67 billion fund, $2.8 billion class action settlement |
| Court Involvement | Court-appointed Monitoring Committee, Resolution of Appeals, Final Settlement |
| Claim Administration | Email notifications, Toll-free phone number, Online claim submission and documentation upload |
| Fraud Prevention | Blue Cross Blue Shield leads national efforts, Partners with state and federal agencies and advocacy organizations, Reporting and investigation of fraud, Member education and protection |
| Examples of Fraud | Phantom claims, Unauthorized use of insurance information, Falsified records, Unbundling services, Misrepresenting locations, Unlicensed medical practice, Duplicate claims |
| Reporting Channels | Local BCBS company, Fraud hotline, Online resources for reporting malicious calls and telemarketers |
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What You'll Learn
Hospitals opt out of $2.8 billion settlement
Several large health systems and dozens of other hospitals and healthcare providers have opted out of a record-setting $2.8 billion settlement with Blue Cross Blue Shield (BCBS) and are pursuing antitrust litigation against the insurer. The lawsuits, filed in California, Illinois, and Pennsylvania federal courts, allege that BCBS engaged in anticompetitive practices that resulted in lower reimbursement rates for hospitals and healthcare providers compared to other insurers.
The $2.8 billion settlement, which is the largest healthcare settlement ever for a U.S. antitrust case brought by a private party, resolves claims that BCBS violated antitrust laws by conspiring to limit competition and fix prices. The settlement culminated litigation that stretched back to 2012. Under the terms of the settlement, BCBS does not admit any wrongdoing.
The hospitals and healthcare providers that opted out of the settlement are seeking to recover greater individual damages than what they would have received as part of the class-action settlement. The new plaintiffs in the lawsuits include Bon Secours Mercy Health, Temple University Health, and the University of Pennsylvania Health System, among others. These plaintiffs did not immediately respond to requests for comment on the lawsuits.
According to the plaintiffs, hospital price transparency files illustrate the payment rate discrepancy between BCBS and other insurers, with BCBS generally paying significantly less than other commercial payers. BCBS previously adhered to the "National Best Efforts Rule," which required member health plans to derive at least two-thirds of their national revenue from Blue brands, potentially stifling competition. A separate but related settlement in 2020 required BCBS to phase out this practice.
The BCBS settlement is a class-action antitrust lawsuit called "In re: Blue Cross Blue Shield Antitrust Litigation MDL 2406." The settlement is currently pending final approval before Chief U.S. District Judge R. David Proctor in Birmingham, Alabama. While BCBS has indicated that it will defend against any related litigation, the company does not admit any fault as part of the settlement.
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Blue Cross Blue Shield Antitrust Litigation
The Blue Cross Blue Shield Antitrust Litigation (MDL No. 2406) refers to a class-action lawsuit brought against Blue Cross Blue Shield (BCBS). The plaintiffs in the case—referred to as the "Provider Plaintiffs"—alleged that BCBS violated antitrust laws by illegally dividing the United States into "Service Areas" and agreeing not to compete within those areas. The Provider Plaintiffs also claimed that BCBS companies fixed prices for services provided.
To resolve these claims, BCBS agreed to a $2.8 billion settlement fund to avoid the risk and cost of further litigation. However, only 8% of the net settlement fund ($160 million after fees and expenses) is allocated to professionals, including medical and healthcare groups, organisations, and individual professionals such as psychologists. The remaining majority of the fund will go to hospitals and large healthcare facilities.
The settlement class includes all providers in the U.S. (except for excluded providers) who currently provide or have previously provided healthcare services, equipment, or supplies to any patient insured by BCBS. The court did not decide in favour of either the plaintiffs or the settling defendants; instead, both sides agreed to the settlement to avoid further litigation.
The deadline to file a claim was November 5, 2021. Those wishing to exclude themselves from the settlement class were required to mail a request, including specific personal information and a physical signature, by March 4, 2025.
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Plaintiffs accuse Blue Cross of underpaying
Plaintiffs, including Bon Secours Mercy Health, Temple University Health, and the University of Pennsylvania Health System, have accused Blue Cross Blue Shield (BCBS) and its affiliates of underpaying them by billions of dollars. The lawsuits, filed in federal courts in California, Illinois, and Pennsylvania, accuse BCBS of dividing the country into exclusive areas where they did not compete, violating antitrust law and driving down reimbursements. This alleged conspiracy resulted in increased insurance costs and lower reimbursements for healthcare providers, including the plaintiffs.
The lawsuits claim that BCBS and its related entities colluded to avoid competing and to limit competition in the sale of health insurance and administrative services. This behaviour is alleged to have violated antitrust laws and resulted in higher costs for consumers and lower reimbursements for healthcare providers. The plaintiffs allege that they were paid far less than they would have received in a competitive market and are seeking damages that exceed those offered in the class-action settlement.
The class-action settlement, worth $2.8 billion, is pending final approval before Chief U.S. District Judge R. David Proctor in Birmingham, Alabama. The plaintiffs in the new lawsuits are opting out of this settlement, believing they can obtain greater individual damages through separate legal action. The law firms representing the plaintiffs in these new cases include Duane Morris, McKool Smith, K&L Gates, and Pearson Warshaw.
The accusations of underpayment by BCBS are not isolated incidents, as a separate $2.7 billion settlement was reached with subscribers in 2020, and BCBS agreed to pay an additional $2.8 billion to health providers for underpaid reimbursements. This separate settlement also included a series of reforms to increase competition in the market for health insurance, addressing the antitrust concerns raised by the plaintiffs.
The plaintiffs in these cases are seeking financial compensation for the alleged underpayment and damages caused by the anticompetitive behaviour of BCBS. The lawsuits and settlements aim to hold BCBS accountable for their business practices, increase competition in the health insurance market, and ensure fair reimbursement rates for healthcare providers.
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Healthcare fraud and abuse
- Misrepresentation of the type or level of service provided
- Misrepresentation of the individual rendering the service
- Billing for items or services that have not been provided or are not medically necessary
- Providing or receiving kickbacks, such as cash, gifts, or other services, in exchange for referrals
- Falsifying cost reports or other documents supporting a claim
To combat healthcare fraud and abuse, various tools and measures have been implemented. For instance, the Connecticut False Claims Act (CT FCA) authorises the court to award whistleblowers who initiate court cases, providing protection from workplace retaliation. Additionally, healthcare providers like Johns Hopkins Health Plans have established Special Investigations Units (SIUs) dedicated to identifying and preventing fraud and abuse. These units work in conjunction with regulatory authorities to investigate and prosecute instances of fraud and abuse.
In 2025, the US Department of Justice announced the National Health Care Fraud Takedown, resulting in criminal charges against 324 defendants, including medical professionals, in federal and state districts. This operation targeted healthcare fraud schemes that caused an intended loss of over $14.6 billion. The department also worked with other agencies to create a Health Care Fraud Data Fusion Center, leveraging advanced technologies to identify emerging fraud schemes.
While the specific details of the lawsuit between hospitals and BCBS (Blue Cross Blue Shield) are unclear, it appears to be related to an antitrust settlement. A class action antitrust lawsuit, In re: Blue Cross Blue Shield Antitrust Litigation MDL 2406, resulted in a settlement between BCBS plans and healthcare providers. The settlement is final, and claims are currently being reviewed.
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Reporting malicious calls
I did not find any relevant information about a hospital lawsuit with BCBS being a fraud. However, here is some information about reporting malicious calls.
If you are receiving malicious calls, there are several steps you can take to block and report them. Firstly, it is recommended not to answer calls from unknown numbers. If you do answer and realise it is a scammer or an unwanted caller, hang up immediately.
Telephone scammers often try to lure you in with enticing offers, appeals to charity, or claims of government affiliation. They will pressure you to make a quick decision and their goal is to get you to send them money or give them your personal information.
To block unwanted calls, you can use third-party call-blocking apps, which use blacklist databases to block numbers that have received a lot of complaints. Many mobile phones also have built-in features to identify and block suspected spam calls or calls from specific numbers. Additionally, Samsung offers a call-blocking solution called Smart Call, and there are call-blocking devices that can be installed directly on your home phone or over the internet. Some phone carriers also provide call-blocking services, which may be free or come at an additional cost.
If you wish to report malicious calls, you can file a complaint with the Federal Communications Commission (FCC) if you believe you have received an illegal call or text, or if you think you're the victim of a spoofing scam. You can also report political text messages that were sent without your prior express consent by forwarding the texts to 7726 or "SPAM". For violations of the National Do Not Call Registry, you can file a complaint with the Federal Trade Commission (FTC).
It is important to note that while reporting these calls, the FCC does not resolve individual complaints. However, they use this information to inform policy decisions and potential enforcement actions against callers violating their rules.
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Frequently asked questions
Dozens of U.S. hospital systems and healthcare providers filed lawsuits accusing Blue Cross Blue Shield (BCBS) and affiliates of underpaying them by billions of dollars.
No, the lawsuit is not a fraud. The hospitals and providers are opting out of a $2.8 billion class-action settlement, which they believe would yield greater individual damages.
The Blue Cross Blue Shield Settlement is a resolution between Blue Cross Blue Shield Plans and Healthcare Providers. The settlement is final, and the process of reviewing claims and sending determination emails is underway.
If you suspect healthcare fraud, you should report it to your local BCBS company by calling the number on the back of your member identification card. If you are not a member, you can call the fraud hotline at 1-877-327-2583.
Examples of healthcare fraud include phantom claims for services never provided, using someone else's medical insurance information, falsifying signatures or records, and unbundling services to increase medical payments.
