Holland wins $1.6 million in Blue Cross Blue Shield lawsuit

Feb 23, 2012

An Ottawa County Circuit Court judge is ordering Blue Cross Blue Shield to pay the City of Holland $1.6 million. Holland is one of dozens of communities that sued Blue Cross over variable fees charged on insurance claims filed by employees.  The city claims the insurer didn’t tell them about the fees for 17 years.

Blue Cross Blue Shield spokesperson Helen Stojic says the fees were not hidden.“As the lawsuit proceeds to the appellate courts we’re confident that the legal process will result in a finding that our access fee were known to our customers,” Stojic said.

Stojic says the City of Holland got access to millions of dollars in discounts by paying the fees. “It helped save money – hold down costs for that community,” she said.

There are dozens of other pending cases alleging the insurance company hid fees from local governments in Michigan.

Varnum Law partner Aaron Phelps says his law firm has filed 10 lawsuits in federal court over the same fees for private companies. He says there’s been between 25 and 30 total cases filed over the BCBS fees. He says in all of the cases BCBS has either settled with the plaintiffs or judges have ruled against BCBS.

Stojic says a judge did rule in the company’s favor in a similar lawsuit filed by Calhoun County.

“I’ve heard that many times now,” Phelps chuckles. But he says there’s more details Stojic is leaving out.

“The only issue that went to trial was the question of whether BCBS had fraudulently concealed its wrongful conduct, and if so, whether the plaintiffs should have discovered that more than 2 years prior to when they filed their lawsuit. The jury returned a verdict in favor of BCBS on that 1 issue but then judgment was entered of $1.1 million against BCBS anyway. So that’s not a case that BCBS won. It’s a case where BCBS won a sub-issue that related to the statue of limitations”

He says there’s an internal BCBS document that came out in one of the cases that states the fees would not be disclosed to the customer.

He says all of BCBS competitors charge fees to access discounts. But judges have ruled that those fees still have to be disclosed, discounts or not.

Holland Mayor Kurt Dykstra says the jury’s verdict in the city’s favor speaks for itself. “Ultimately the jury concluded that regardless of what Blue Cross says now, they concealed the charging of these access fees,” Dykstra said.