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Reuters
05-03-2025
- Business
- Reuters
Hospitals line up to sue Blue Cross, opting out of $2.8 bln settlement
March 5 (Reuters) - Dozens of U.S. hospital systems and other healthcare providers filed lawsuits on Tuesday accusing Blue Cross Blue Shield and affiliates of underpaying them by billions of dollars, opening a new front in litigation against the insurance giant. The lawsuits in federal courts in California, Illinois and Pennsylvania were lodged by medical providers that are declining to participate in a $2.8 billion class action settlement in federal court in Alabama. Hospitals and other providers faced a Tuesday deadline to decide whether to opt out of the settlement, which is pending final approval before Chief U.S. District Judge R. David Proctor in Birmingham. The new plaintiffs include, opens new tab Bon Secours Mercy Health, Temple University Health and University of Pennsylvania Health System. They did not immediately respond to requests for comment on the lawsuits, which could yield greater individual damages than they stood to obtain as part of the class-action settlement in Alabama. Blue Cross declined to comment. The insurer denied any wrongdoing in agreeing to the earlier settlement. A final approval hearing before Proctor is scheduled for July 29. The new lawsuits and the class action both claim Blue Cross and related entities divided the country into exclusive areas where they did not compete. The plaintiffs claim the alleged conspiracy violated antitrust law, increasing the cost of insurance and driving down reimbursements. 'Defendants colluded for one reason: to pay healthcare providers, including plaintiffs, far less than they would have been paid in a competitive market,' Temple University and other plaintiffs alleged in the lawsuit filed, opens new tab in the Philadelphia federal court. Temple's lawyers at Duane Morris and McKool Smith did not immediately respond to a request for comment. Other law firms that filed the new cases include K&L Gates and Pearson Warshaw. Attorneys representing the health providers in the class-action settlement did not immediately respond to a request for comment. Blue Cross separately in 2020 agreed to settle antitrust claims by commercial and individual subscribers who claimed they were overcharged. The U.S. Supreme Court last year upheld a $2.7 billion settlement in that case. Some major companies chose to pursue their own lawsuits, and those cases are pending. Read more: Ethics ruling bars law firm from taking hospital clients in Blue Cross case Plaintiffs in Blue Cross antitrust settlement drop bid to disqualify law firm Law firms wrangle over fees from $2.7 bln Blue Cross Blue Shield settlement
Reuters
27-02-2025
- Business
- Reuters
Ethics ruling bars law firm from taking hospital clients in Blue Cross case
Feb 27 (Reuters) - A judge in Alabama has barred a large U.S. law firm from representing plaintiffs in major litigation accusing Blue Cross Blue Shield of underpaying hospitals, physicians and other medical providers for years. The decision, opens new tab on Wednesday was a rebuke for 1,100-lawyer law firm Polsinelli, which is known for representing healthcare companies and which had been advising clients on potentially opting out of a $2.8 billion class-action settlement in the Blue Cross case in order to sue the insurer on their own. Chief U.S. District Judge R. David Proctor in Birmingham said in his ruling that attorneys who now work at Polsinelli had earlier represented Blue Cross Blue Shield of Alabama in the case, creating an ethical conflict. 'Lawyers who until recently did substantial work for (Blue Cross) in this litigation are now at a firm that is taking materially adverse positions against it — in that same litigation,' Proctor wrote in his order. Polsinelli and lawyers for the firm did not immediately respond to requests for comment. The plaintiffs declined to comment. Blue Cross had supported the plaintiffs' bid to disqualify Kansas City, Missouri-based Polsinelli from the case. Blue Cross declined to comment. In the underlying litigation, 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 providers' class action, filed in 2012, said the alleged conspiracy increased the cost of insurance and drove down reimbursements. Blue Cross Blue Shield denied wrongdoing but agreed in October to settle with the plaintiffs for $2.8 billion. Alabama-founded law firm Maynard Nexsen had been one of the firms defending a Blue Cross affiliate in the case, Blue Cross Blue Shield of Alabama, billing thousands of hours. In 2024, some of the Maynard Nexsen attorneys left the firm to join Polsinelli, the decision said. Lawyers for the plaintiffs who negotiated the settlement complained earlier this month that a different Polsinelli lawyer was talking with clients about opting out of the deal and potentially filing their own lawsuits, violating ethics rules against conflicts of interest. Attorneys for Polsinelli denied that Polsinelli's hiring of a handful of lawyers from Maynard Nexsen created a conflict. Polsinelli said clients that are weighing whether to accept the settlement did business with non-Alabama Blue Cross companies. 'The right to counsel of one's choosing is a bedrock principle of American jurisprudence,' Polsinelli told Proctor, opens new tab. Proctor has preliminarily approved the $2.8 billion settlement in the case. Hospitals and other providers face a March deadline to decide whether to participate in the settlement. 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-RDP. Plaintiffs in Blue Cross antitrust settlement drop bid to disqualify law firm Law firms wrangle over fees from $2.7 bln Blue Cross Blue Shield settlement Blue Cross' $2.8 bln health provider settlement wins judge's preliminary approval
