The Blue Cross Blue Shield Association (BCBSA) and its 33 member companies reached a $2.8 billion settlement in October 2024 to resolve a 12-year antitrust lawsuit filed by healthcare providers, including hospitals, physicians, and other professionals. Preliminary approval was granted on December 4, 2024, by Judge R. David Proctor, with final approval on August 19, 2025. The lawsuit, In re: Blue Cross Blue Shield Antitrust Litigation (MDL No. 2406), began in 2012 in the U.S. District Court for the Northern District of Alabama.
Providers alleged that BCBSA and its affiliates violated the Sherman Antitrust Act by engaging in anticompetitive practices, specifically by dividing the U.S. into exclusive “service areas” and agreeing not to compete in those regions, which suppressed competition, increased insurance costs, and reduced provider reimbursements. They also claimed price-fixing through the BlueCard program, which processes claims for out-of-network patients. BCBSA denied the allegations but agreed to the settlement to avoid further litigation costs and risks.
The settlement, the largest antitrust agreement in U.S. healthcare history, includes a $2.8 billion fund and operational reforms to enhance transparency and efficiency in the BlueCard program, such as faster claims processing, a cloud-based platform, and prompt payment guarantees. Eligible providers who treated Blue Plan patients from July 24, 2008, to October 4, 2024, could file claims until July 29, 2025, though nearly 6,500 providers opted out to pursue separate lawsuits.
A court document indicated that nearly 6,500 provider organizations chose to opt out of the settlement. These providers include a range of healthcare entities such as hospital systems, physician groups, clinics, and other healthcare facilities across the United States. Notable organizations that opted out include the University of Pennsylvania Health System, Geisinger, MedStar, CommonSpirit, Bon Secours Mercy Health, Temple University Health, and physician staffing firm TeamHealth.
Providers who opted out likely did so to preserve their right to pursue individual lawsuits against BCBS, believing they could achieve greater financial recovery or address specific grievances through separate legal action. The settlement required providers to release claims against BCBS for the same antitrust issues (e.g., market allocation and price-fixing through exclusive service areas and the BlueCard program). Opting out allows these providers to file their own claims, potentially seeking higher damages than what they would receive from the settlement’s $2.8 billion fund, where 92% is allocated to healthcare facilities and only 8% ($160 million after fees) to professionals like individual practitioners.
Many of the providers who opted out filed new lawsuits in federal courts in states like Pennsylvania, California, and Illinois. For example, a group led by Temple Health and Penn State Health filed a lawsuit in the U.S. District Court for the Eastern District of Pennsylvania. These lawsuits echo the original allegations, claiming BCBS’s anticompetitive practices, such as colluding to limit competition and underpaying providers, violated antitrust laws. The plaintiffs argue that BCBS’s actions resulted in payments far lower than what they would have received in a competitive market. California providers who reportedly opted out include:
– – Providence St. Joseph Health: A large nonprofit health system with extensive operations in California (e.g., hospitals in Los Angeles, Orange County, and Northern California). They opted out to seek potentially larger recoveries, including treble damages under antitrust law.
– – The Regents of the University of California (UC Health): The governing body for the University of California’s health system, which operates major academic medical centers and hospitals across the state (e.g., UCLA Health, UCSF Health). They cited concerns over the settlement’s release of future claims and the potential for higher individual damages.
– – NorthBay Healthcare Corporation: A community-based health system headquartered in Fairfield, California, serving Solano County with hospitals and clinics. They opted out due to dissatisfaction with the settlement’s monetary allocation (e.g., only 8% for professionals after fees) and to preserve litigation rights.
– – CommonSpirit Health: While headquartered in Chicago, this system has a major presence in California through its Dignity Health division (operating dozens of hospitals statewide, including in Sacramento, San Francisco, and Southern California). They opted out for similar reasons, focusing on allegations of BCBS’s “take-it-or-leave-it” contracting and reimbursement penalties.