Blue Cross & Blue Shield of Rhode Island has settled two class-action suits for $17.5 million in connection with claims processing practices that allegedly reduced subscribers’ benefits and increased their out-of-pocket expenses for several years.
In the settlement, Blue Cross does not admit fault, but does accept a permanent ban on those practices, which “are no longer in place,” according to a company news release. UnitedHealthcare of New England settled a smaller, but similar case in 2002 for $4.4 million.
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Blue Cross explained its settlement as a way to “avoid the cost and uncertainties of trial and possible appeals,” and to expedite payments to the affected people. Blue Cross also said it does not expect this to affect its reserves or increase rates or premiums.
The bulk of the payout, to be administered by plaintiffs’ lawyer Peter N. Wasylyk (the Providence legislator), will go to an estimated 115,000 former and current subscribers, who will get $10 to $2,500, or an average of about $95 each.
Blue Cross, the state’s leading health insurer for 66 years, now covers over 680,000 people.
Court hearings are scheduled for Wednesday to finalize the settlement. Then Wasylyk’s office will begin the process of locating and contacting all the people eligible for payment. Each will get a letter, and there will also be ads in the local press, a Web site and a toll-free number.
“Hopefully by summertime, the disbursements will occur,” Wasylyk said. “But what’s great about this settlement is that the class members will receive the payment without a cumbersome claims process” – they’ll just get the checks automatically.
The lawsuits were filed in 1996 in U.S. District Court, Providence, and state Superior Court. They were consolidated in July 2003.
