BCBS’s antitrust settlement includes hospital compensation. But should you opt out?

Contributed by Bradley G. Gingerich , Vice President of Payer Strategy, Ensemble

$2.67 billion — that’s the monetary settlement from the recent Blue Cross Blue Shield (BCBS) antitrust lawsuit.

This significant legal case involves allegations that BCBS plans conspired to limit competition among themselves, resulting in higher premiums, reduced options for consumers and fixed prices for healthcare providers. Its settlement includes both monetary compensation for hospitals and changes to BCBS business practices to promote competition.

Hospitals and health systems must submit a decision to opt out of the class action lawsuit by March 4, 2025. If you opt in, you must submit a claim form by July 29, 2025, to receive any monetary payment under the settlement.

But where do affected hospitals go from here? Should they opt in and join the class action settlement, or opt out and instead pursue independent action against BCBS? Which will help recoup missing revenue that can be reinvested into patient care?

We’ve identified three key criteria to help hospitals decide on their next steps. Hospitals should carefully evaluate their position against the following criteria and seek legal advice to make an informed decision.

Three key criteria to evaluate opt in/out options

The decision to opt out may be in their best interest if these criteria are met:

1. Market dominance: BCBS should be the largest payer relative to payer mix in the hospital's market.
2. Lowest contracted rate: BCBS should have received the greatest discount relative to the other commercial payers over the liability period of 2008 to 2024. This can be confirmed by analyzing the payment-to-charge ratio across payers or comparing contract rates, with assumptions made in the case of incomplete historical data.
3. Revenue threshold: The hospital's annual revenue from BCBS commercial plans should be large enough to ensure the potential liability justifies legal expenses. A good threshold for consideration is $60 million in annual BCBS commercial revenue.

Analyzing the impact

Experts estimate that the potential settlement award for providers choosing to opt in could be around 0.25% of their BCBS commercial revenue over the 16-year period in question. For providers choosing to opt out, their damages claim could be nearly 5% of BCBS commercial revenue over the same period.

For example, a hospital that averaged $100 million per year in BCBS commercial revenue over the 16-year period may expect approximately $4 million as a settlement award if opting in ($1.6B x .0025). Distribution is estimated by the end of 2026. If the same provider opted out and pursued damages outside of the settlement, the claim could rise to $80 million ($1.6B x .05). The expected outcome and timing of this action would be subject to many factors and would be difficult to forecast with any certainty.

The decision to opt in or out should be based on a thorough understanding of the potential benefits and risks, as well as the specific circumstances of the hospital's market and contractual relationships with BCBS.

While Ensemble does not recommend opting in or out, we encourage hospitals that meet the above criteria to consult with legal counsel. Counsel can provide a formal assessment, explain the expense structure, timeline and rights to injunctive relief from the class.

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