Blue Cross Blue Shield (BCBS) has agreed to pay $2.8 billion to settle an antitrust class action lawsuit brought by hospital systems, physicians, and other healthcare providers. The plaintiffs alleged that BCBS and its affiliates underpaid them for services and reimbursements. This proposed settlement, filed in an Alabama federal court on Monday, marks the largest ever healthcare antitrust settlement in U.S. history.

The healthcare providers originally sued BCBS in 2012, accusing the insurer of dividing the country into exclusive markets to avoid competition among its affiliates. The plaintiffs argued that this alleged nationwide conspiracy drove up the cost of insurance while reducing payments to healthcare providers.

Despite denying the allegations, BCBS agreed to settle the case in order to "put years of litigation behind us," the insurer said in a statement. The settlement, which still requires approval from U.S. District Judge R. David Proctor, would also include significant operational changes aimed at increasing transparency and improving the efficiency of BCBS’s claims processing system.

One key change in the settlement involves the BlueCard program, which facilitates how providers submit claims for reimbursement. The new system-wide platform will enhance member benefits, eligibility verification, and claims tracking, leading to more accountability. Additionally, the settlement gives healthcare providers expanded opportunities to negotiate contracts with BCBS plans.

BCBS will also spend hundreds of millions of dollars to implement these non-monetary changes, which aim to bring more transparency and fairness to their reimbursement processes. The settlement applies to healthcare providers, including hospitals and certain doctors, who treated BCBS plan patients between July 2008 and October 2024.

The lead attorneys for the plaintiffs, Joe Whatley and Edith Kallas, called the settlement "transformative" for the healthcare industry. As part of the agreement, the attorneys are expected to request up to $700 million in legal fees.

This settlement follows a related $2.7 billion antitrust settlement BCBS reached in 2020 with commercial and individual subscribers, which was upheld by the U.S. Supreme Court in June.

The case against BCBS originated in 2012 when healthcare providers accused the insurer of creating a monopolistic environment through its affiliate agreements. The plaintiffs claimed that these actions restricted competition and led to artificially low reimbursement rates for services provided to BCBS plan members.

This new settlement is part of a broader push in the healthcare industry to address longstanding concerns about transparency and fairness in insurance practices.

The settlement is seen as a significant step toward reforming healthcare reimbursement practices. By increasing transparency in the BlueCard program and allowing for more competitive contracting opportunities, the agreement aims to balance the needs of healthcare providers with the insurer’s business model.