On October 11, 2016, Chief U.S. District Judge Denise Page Hood of Eastern District of Michigan granted preliminary approval of a $30 million settlement that is substantially similar to the original $30 million settlement, which was granted preliminary approval on June 26, 2014, in this antitrust class action in which plaintiffs, direct purchasers of healthcare services, allege that services were overpriced.

Cohen Milstein was appointed co-lead counsel on May 29, 2012.

Case Background

Cohen Milstein represents Michigan Regional Council of Carpenters Employee Benefits Fund, Abatement Workers National Health and Welfare Fund, and Monroe Plumbers & Pipefitters Local 671 Welfare Fund, and other purchasers of hospital healthcare services in a lawsuit against Blue Cross Blue Shield of Michigan ("BCBSM") regarding its contracts with hospitals.

Plaintiffs allege that BCBSM entered into anticompetitive agreements with hospitals throughout Michigan that guaranteed BCBSM would receive rates at least as favorable as other insurers, and in many cases more favorable rates. These agreements inflated the reimbursement rates paid by rival healthcare insurers and their customers in Michigan. In exchange for these guarantees, BCBSM agreed to pay the hospitals higher reimbursement rates for medical services, forcing its own insureds and self-insureds to overpay for hospital healthcare.

The original lawsuit was filed on October 29, 2010. Cohen Milstein was appointed co-lead counsel on May 29, 2012. On November 30, 2012, the district court denied BCBSM’s motion to dismiss, finding that Plaintiffs had alleged “plausible claims of injury.” Thereafter, the parties engaged in two years of extensive discovery that included 169 depositions, millions of pages of documents, and an almost unprecedented volume of transactional data.

The parties reached a settlement on June 23, 2014, while plaintiffs’ motion for class certification was pending. The settlement created a $29,990,000 fund for the benefit of the Settlement Class. The district court preliminarily approved the settlement on June 26, 2014.

On June 7, 2016, the U.S. Court of Appeals for the Sixth Circuit remanded the case, vacating the Michigan federal court’s approval of the settlement after 26 self-insured companies whose health care claims had been administered by BCBS Michigan objected to the process under which the previous settlement was reached.

In August of 2016, Chief U.S. District Judge Denise Page Hood denied the 26 companies’ request to intervene in the suit as it proceeded on remand, finding that the Sixth Circuit’s opinion hadn’t addressed their right to intervene, only the unsealing of court records.

 

The case is styled: The Shane Group, Inc. v. Blue Cross Blue Shield of Michigan, Case. No. 2:10-cv-14360-D, U.S. District Court, Eastern District of Michigan