Mississippi's largest health insurance provider has agreed to repay up to $8.5 million to an estimated 70,000 Mississippi customers who did not benefit from discounts on bills.
Although Blue Cross and Blue Shield of Mississippi has denied any wrongdoing, it allegedly had negotiated discounts with medical-care providers but did not pass them on to customers. That meant patients were paying on the actual hospital bill rather than the discounted amount.
Similar lawsuits in Louisiana, Missouri and Tennessee all were settled. Attorneys said there's a tentative settlement in a similar suit in Illinois, and a settlement is near in Oregon.
The agreement would affect any customer who was hospitalized, had dependents in the hospital or received outpatient hospital services between Jan. 1, 1991, and Sept. 1, 1995.
The agreement settles a class-action lawsuit filed in federal court against the company in August 1993. The complaint alleged the Blues renegotiated subscribers' coinsurance rates with hospitals without passing the savings on to its customers or telling the customers about the new rates.
For example: A subscriber with a 20% coinsurance rate was required to pay $200 on a $1,000 hospital bill. If the Blues cut its own bill to, say, $500, the suit alleges the customer's coinsurance payment should have dropped to $100.
The lawsuit alleges the company paid cheaper rates but still collected 20% of the original bill from the customer.
The Blues settled, according to court documents, because "further defense of this litigation would be protracted and expensive and the outcome uncertain."
The settlement entitles eligible customers to "100% of actual losses and punitive damages," said Shane Lang-ston, the plaintiffs' chief attorney.