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BCBS settles with doctors in class action suit


MIAMI--The Blue Cross & Blue Shield Assn. and 23 of its licensed health plans have settled a class action lawsuit with 900,000 physicians and medical societies relating to their business practices.

The settlement includes a guaranteed cash payment of more than $128 million and legal fees not to exceed approximately $49 million, although those figures do not include the value of business changes the plans have agreed to make and the related savings.

The Blues plans have agreed to make several business practice changes, including implementing a definition of medical necessity that ensures that patients are entitled to receive medically necessary care as determined by a physician exercising clinically prudent judgment; ensuring the payment of valid clean claims within 15 days for electronically submitted claims and 30 days for paper claims; providing fee schedules to physicians; and establishing an independent external review board for resolving disputes with physicians concerning many common billing disputes.

The class action lawsuit, known as Love et al. vs. Blue Cross Blue Shield Assn., was filed in 2003, and has been pending before U.S. District Judge Federico Moreno in federal court for the Southern District of Florida in Miami. The complaint identified numerous Blue Cross and Blue Shield plans as defendants in an alleged scheme to defraud doctors in violation of the federal Racketeer Influenced and Corrupt Organizations Act.

The settlement means that more than 90% of all Blues plans in the country have now settled the class action with physicians, the statement said.

The settlement will leave doctors "more time for patient care instead of dealing with what was a complex, cumbersome, costly and frustrating system put in place by Blue Cross and Blue Shield plans," Archie Lamb, plaintiffs' co-lead counsel, said in the statement.

In the statement, the plaintiffs' attorneys cited Minnetonka, Minn.-based UnitedHealth Group Inc. for continuing to litigate against the physicians rather than implementing the business practice changes that other insurers have agreed to. The lawsuit against UnitedHealth and its formerly independent subsidiary, PacifiCare Health Systems Inc., and Bethesda, Md.-based Coventry Health Care Inc. was dismissed by Judge Moreno last year.

UnitedHealth has been involved in several disputes with provider organizations, most recently related to its proposed acquisition of Las Vegas-based Sierra Health Services Inc. and the implementation of a policy that allows the insurer to fine physicians if their patients have laboratory tests in out-of-network facilities.

UnitedHealth could not be immediately reached for comment.