As reported last month in CMA Alert, Blue Shield of California refused to settle a class-action lawsuit filed in 2003 that would have meant tens of millions of dollars to California physicians. This lawsuit alleged that Blue Shield’s payment practices defrauded physicians out of monies due for patient care. Blue Shield of California is one of the few Blue Shield companies of nearly 40 licensees in the nation that has refused to settle this case and pay doctors the money they are owed.

Even though Blue Shield of California chose not to participate in this settlement, all class members, including most California physicians, are eligible for one or more shares of the $130 million settlement. The class includes all physicians who billed any of the Blue Shield companies or their contracted intermediaries (capitated medical groups, IPAs, etc.) for services provided between May 22, 1999, and May 31, 2007.

The deadline to submit a claim is October 19. Physicians do not have to provide documentation for individual Blue Shield claims. To receive your share of the settlement, you need only calculate the aggregate payments received from the settling Blue Shield companies from 2004 to 2006. Claims submitted to Blue Shield of California should not be included in the calculations.

Because Blue Shield of California was unwilling to settle, most California physicians will only be entitled to one settlement share. Physicians who have treated a large number of out-of-state Blue Shield patients may be entitled to more.

Physicians with $5,000 or less in claims billed to the settling defendants are eligible for one pro rata share; those with $5,001 to $49,999 are entitled to five shares; and those with more than $50,000 will receive 10 shares. The share value will be determined once all claims have been received.

If Blue Shield of California had participated in the settlement, most California physicians would have received 10 pro rata shares.

The case, Rick Love, M.D. v. Blue Cross Blue Shield Association, was filed in May 2003 in federal district court in Miami. The suit accused the insurers of a pattern and practice of denying and delaying care, including intentionally programming computer billing databases to automatically downcode physician claims. The suit was filed under the federal civil racketeering (RICO) statutes. Although CMA is not a plaintiff in the suit, the suit affects all physicians because of its class-action status.

More information, including settlement notice and claim form, is available at http://www.hmosettlements.com.

Contact: Desiree Rice, 916/551-2865 or drice@cmanet.org.