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Logo of bmjThis ArticleThe BMJ
BMJ. 2007 May 5; 334(7600): 924.
PMCID: PMC1865422

US health insurance firm settles class action lawsuit brought by 900 000 doctors

The biggest health insurance company in the United States, Blue Cross Blue Shield, has been forced to settle a class action lawsuit brought by 900 000 doctors who claimed that they were not being fairly paid for treating patients.

The lawsuit, filed in the Southern District of Florida in Miami in May 2003, alleged that numerous insurance plans run by Blue Cross Blue Shield, which covered 77 million patients, “had conspired in a massive scheme to defraud doctors in violation of the [1970] federal Racketeer Influenced and Corrupt Organization Act (RICO).”

The Tennessee Medical Association, which filed the original class action lawsuit in 2002 against Blue Cross Blue Shield of Tennessee in Tennessee State Court, said in a statement, “The provisions of the settlement call for BCBST [Blue Cross Blue Shield of Tennessee] and other plans to pay more than $128m [£64m; €94], but more importantly to physicians the settlement will set into motion a series of important business practice changes that bring the estimated value of the entire settlement consideration to well over $1bn.”

The changes called for are in the health insurers' systems for processing reimbursement claims from the doctors. These systems look at doctors' claims and often reduce them by combining or rejecting charges.

Insurers maintain that such systems check for redundant or excessive billing so as to cap medical costs. The doctors and their medical societies say that the insurers conspired to systematically cheat them out of full payment.

The Blue Cross Blue Shield insurance group has promised to change certain practices and among other points has agreed to:

  • • Implement a definition of medical necessity, which ensures that patients are entitled to receive medically necessary care as determined by a doctor exercising clinically prudent judgment in accordance with generally accepted standards of medical practice
  • • Use clinical guidelines that are based on credible scientific evidence published in peer reviewed medical literature
  • • Establish an independent external review board for resolving disputes with doctors over many common billing disputes, and
  • • Provide fee schedules to doctors, provide timely payment, and give 90 days' notice of changes in practices and policies and annual changes to fee schedules.

The settlement must be approved by US district judge Federico Moreno in the federal court in Miami.

William Plested, president of the American Medical Association, said, “The American Medical Association commends Blue Cross Blue Shield Association and 23 of its affiliated companies for agreeing to fundamentally shift how their system conducts business with physicians.”

Articles from The BMJ are provided here courtesy of BMJ Publishing Group