Blue Cross Blue Shield Minnesota to Pay $71M in $2.8B National Settlement Over Competition Claims

Blue Cross and Blue Shield of Minnesota is set to pay $71 million as part of a $2.8 billion nationwide settlement addressing allegations that Blue-branded insurers suppressed competition in health plan markets across the United States, resulting in economic harm to health care providers. This settlement stems from a decade-old litigation claiming that the market dominance of Blue Cross and Blue Shield plans limited competition, thereby reducing compensations paid to providers. The settlement encompasses operational changes within Blue Cross and Blue Shield insurers, who share provider networks under the Blue Card system, to enhance transparency, payment timeliness, and provider contracting opportunities.

The plaintiffs assert that inefficiencies within the Blue Card system have imposed costly administrative burdens and contributed to anti-competitive practices such as price fixing and competition restrictions among the independent Blue companies. Although the insurers deny any wrongdoing, the settlement aims to reform business operations, improve claims processing and payments, and promote more competition within Blue Cross Blue Shield Association member plans across 33 states. Providers who serviced patients under these plans from 2008 through 2024 may file claims under the settlement.

The case reflects broader concerns over market concentration in the health insurance industry, with Blue Cross and Blue Shield plans holding significant market shares in many states, including Minnesota where the Blues are the largest Medicare Advantage insurer and dominant commercial insurer. Regulatory scrutiny and prior settlements, such as a related $2.67 billion agreement resolving claims from health insurance subscribers, have begun to address competitive limitations by adjusting exclusive service area rules and expanding insurers' abilities to compete for large employer contracts.

This settlement proposal will undergo a fairness hearing scheduled for July 29, 2024. If approved, it will mandate Blue Cross and Blue Shield insurers to ensure timely communication and payments to providers, increase transparency in decision-making, and facilitate more competitive contracting opportunities. These measures respond to ongoing regulatory and industry efforts to balance market power and improve health care provider relations within large insurer networks in the United States.