Nonprofit health system Texas Health Resources has sued the Blue Cross Blue Shield Association (BCBSA) and its entities for entering into agreements to limit reimbursements to providers since 2008.
The plaintiffs, in the 179-page lawsuit filed this week, allege horizontal market allocation and price-fixing by geographically restricting how many Blues plans do business in each region. Therefore, each plan benefits from a quid pro quo and “artificially reduced prices” paid to providers, the lawsuit reads.
The BCBSA declined to comment on ongoing litigation.
One in 3 Americans receives health insurance from a Blues plan, and 96% of hospitals contract directly with a Blues plan. Many insurers fall under the Blues umbrella including Elevance Health, Health Care Services Corp., Anthem, Highmark Health, Wellmark, CareFirst, Cambia Health Solutions and a collection of other plans.
These health plans, however, rarely compete against each other. And providers—especially in states like Illinois where the designated Blues plan HCSC has access to more than 60% of privately insured patients—must contract with Blue Cross to access the bulk of patients. If Blue Cross plans competed against each other, providers would receive more favorable terms, the lawsuit reads.
“BCBSA exists solely for the benefit of the Blues and to facilitate their concerted activities, and it committed numerous overt acts in substantial furtherance of Defendants’ collective unlawful objectives and actions,” attorneys for Texas Health Resources said in the complaint (PDF).
Under a separate, decades-long lawsuit, Blues plans agreed to pay a $2.8 billion settlement to providers in October over alleged collusion to prevent competition and lower reimbursements. The BCBSA denied the allegations in that lawsuit, but the company did agree to make changes to its BlueCard program, used to track claims and make prior authorization requests from the provider to health plans.
Yet, in March, dozens of providers filed new lawsuits against Blues plans and opted out of the settlement. The providers said they have not observed changes to Blues’ business practices.
Since then, Bon Secours Mercy Health and numerous Pennsylvania-based systems were among the providers to file new suits against the BCBSA, requesting a jury trial.
The Supreme Court declined to hear a 2020 class-action lawsuit from consumers for similar claims last summer.
Texas Health Resources’ new suit name-checks Blues plans’ use of the BlueCard program and national accounts programs, which apply to employee benefit plans. Profits are then divided among the Blues plans, the health system alleges.
“Rather than forming competing networks in other service areas, the Blues pay the home plan a kickback, called an access fee, and thereby share the excess profits they achieve through the sub-competitive prices the Blues pay to healthcare providers,” said the plaintiffs.
Costs for employers also increase due to the Blues’ business practices, they said.
If an employer has employees based in a certain Blue Cross-covered service area but the company is not located in the state, the employer is on the hook for provider service claims, BlueCard access and admin fees and admin fees charged by the Blues plan.
The health system is asking the judge to enjoin the defendant from using the BlueCard program and national accounts programs as well as applying its agreements with other Blues plans and providers.
Texas Health Resources also sued the big three pharmacy benefit managers and three drugmakers for colluding to raise the price of insulin, reported Becker’s.