The Blue Cross and Blue Shield Association, along with a majority of its nationwide affiliated "Blues plans," has reached settlement with a class of approximately 900,000 physicians, to resolve a class action suit brought in the Southern District of Florida.

The class action suit, Love vs. Blue Cross Blue Shield Association et al., involved allegations that the defendant plans had participated in a scheme to defraud the plaintiff physicians in violation of the federal Racketeer Influenced and Corrupt Organizations Act ("RICO"). The thrust of the case was that the health insurers had conspired to diminish, delay and deny payments rightfully owed to the plaintiff physicians, through such means as developing utilization management guidelines that limited medically necessary care, joint development of claims processing systems that deliberately delayed or denied payments, and use of reimbursement guidelines that deprived physicians of fair payment.

The settlement includes payment by the Blues of over $128 million into a fund for the class members. Additionally, the Blues also agreed to pay class members' attorneys' fees, and to make "important and valuable" business changes. These business changes are the crux of the matter to many of the plaintiffs, and shift a level of bargaining leverage to the medical care providers in the context of provider/payor contract negotiations. The settlement is another in a series of victories for physician groups in their ongoing disputes with third party payors.

The Love case, and other similar cases, will be the subject of an article in the upcoming edition of the Edwards Angell Palmer & Dodge Insurance and Reinsurance Update.

Click here to review the Settlement Agreement.