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Plaintiffs in Antitrust MDL Strike $2.67B Settlement with Blue Cross/Blue Shield
- Client News
- October 31, 2020
Practices
In a historic recovery for a putative class of individual customers and small-employer insurance providers represented by Paul, Weiss and other firms, Blue Cross/Blue Shield insurers agreed to a $2.67 billion settlement and other injunctive relief, resolving an antitrust class action that challenged BCBS’s system and business practices.
Paul, Weiss is a member of the plaintiffs’ steering committee; litigation partner Bill Isaacson filed the first case in 2012. The class action litigation was brought on behalf of a class of over 100 million subscribers and involved more than 40 plaintiffs groups. They allege that BCBS entities conspired not to compete with each other for health insurance customers, resulting in reduced competition and lower reimbursement. In addition to monetary damages, they sought injunctive relief to increase competition in the insurance market.
This was among the first antitrust class actions against BCBS to survive a motion to dismiss. On summary judgment, the district court ruled that the BCBS system would be examined under the rules for per se illegality and not the rule of reason.
The proposed settlement, pending court approval, marks one of the largest monetary recoveries ever achieved in an antitrust class action settlement. The agreement would eliminate a national cap on revenues permitted for BCBS entities that requires two-thirds of each member plan's national health care-related revenue to come from "Blue-branded" services. It would also eliminate some restraints on acquisitions by BCBS organizations, eliminate some direct-contracting restrictions and limit other practices giving preference to BCBS-related services. Compliance would be monitored for five years.
The case was led by Paul, Weiss litigation partner Bill Isaacson.