DETROIT (AP) — Blue Cross Blue Shield of Michigan faces lawsuits in the state claiming the insurer has charged some local governments hidden fees to administer health care plans, according to a recent newspaper report.
The Detroit Free Press reports the cases include a recent jury verdict of about $1.5 million for the city of Pontiac and an ongoing case in Calhoun County where Blue Cross is accused of adding millions of dollars in extra fees to administer a contract without telling the county.
Blue Cross denies the charges made in the court cases and is considering appeals in the rulings that have gone against it. Blue Cross says its practices were well known to plaintiffs, are common in the industry and have saved millions of dollars for the employers.
The lawsuits claim Blue Cross hid extra fees charged to employers including county and local governments. The suits claim Blue Cross used some of the money to reduce monthly premiums for senior citizens who buy insurance to supplement their Medicare coverage.
The newspaper reported that Troy attorney William Horton has filed 15 suits against Blue Cross since 2008 related to billing practices for self-funded health plans. In addition to the Pontiac verdict, Horton won a $150,000 settlement for the Oakland County road commission and an undisclosed amount for Sterling Heights. Most of the suits are pending.
The suits claim that Blue Cross, a nonprofit company, breached its legal duty to deal openly with employers about the extra fees.
Blue Cross spokeswoman Helen Stojic said the fees aren’t hidden but can vary to adjust for fluctuating use of hospital services. Blue Cross has “argued vigorously in court and produced witnesses to support our position that the disputed fees were disclosed and plaintiffs in each case were aware of and agreed to the fees,” Stojic told the newspaper.
Stojic said Blue Cross has had legal victories, including one judge who refused to convert the cases into a class action.
The lawsuits in state courts are independent from an antitrust lawsuit filed against Blue Cross last month by the U.S. Justice Department.
Blue Cross also says it will contest the Justice Department allegations.
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