Blues plans' $2.7B antitrust settlement upheld by appeals court

A federal appeals court has upheld Blues' insurers nearly $2.7 billion antitrust settlement.

The Eleventh Circuit Court's opinion (PDF), issued earlier this week, upholds a 2022 ruling in Alabama district court and paves the way for the funds to be distributed. The settlement also resolves a lengthy legal fight that stems from a class-action lawsuit alleging that major Blue Cross Blue Shield plans divvied up geographies to avoid competing against one another.

The Blue Cross Blue Shield Association agreed to the settlement in 2020, and other parties followed suit.

Home Depot, a major employer, challenged the Alabama ruling, however, arguing that if it were allowed to stand it could stymie future antitrust efforts against the Blues system.

However, the court disagreed, saying that while the settlement does include a release for future class-action claims against Blues plans, it does not prevent the federal government from pursuing antitrust action against a Blue Cross plan.

"The release in this appeal is limited and affects the rights of only some private individuals to sue Blue Cross, and it does not affect public enforcement of the antitrust laws," the court said. 

"The settlement agreement does not bar the Department of Justice or state attorneys general from pursuing civil claims or criminal charges against Blue Cross," the judges added. "Home Depot’s concern that the release will undermine the enforcement of the antitrust laws is overstated."

Another appeal, led by Topographic and Employee Services, two consultancies, also took issue with the settlement's approach to splitting the class into two groups: one including mostly self-funded clients and one with fully insured firms. Under the current arrangement, most of the settlement will be paid out to the fully insured plan sponsors.

While the court did acknowledge that this approach is uneven, it determined that it was not established unfairly.

"The self-funded claimants were represented by their own counsel and class representatives in the settlement negotiations and received some compensation from the settlement," the court said. "Although the settlement agreement’s allocation is facially unequal, it is not facially unfair."