PROVIDER PLAINTIFFS FILE MOTION FOR CLASS CERTIFICATION IN BLUE CROSS AND BLUE SHIELD MULTIDISTRICT ANTITRUST LITIGATION

On April 15, 2019, Provider Plaintiffs filed their Motion for Class Certification in their MultiDistrict antitrust case against the Blue Cross and Blue Shield Association and all of the Blue Cross and/or Blue Shield licensees. The Motion seeks an Order certifying two classes of acute care hospital providers in Alabama: one class consisting of all Alabama acute care hospitals that have submitted claims for covered services to a Blue Plan, seeking damages under Federal Rule of Civil Procedure 23(b)(3); and one class consisting of all acute care hospitals in Alabama for injunctive relief under Rule 23(b)(2). In addition, the Motion seeks certification of two classes of healthcare professionals including medical doctors and other non-acute care hospital providers in Alabama. The Motion also seeks certification of the issue of whether the Defendants have violated the antitrust laws under Rule 23(b)(4).

The litigation concerns the Blues’ practice of dividing the country into exclusive service areas and fixing the reimbursement rates paid to healthcare providers, practices which Provider Plaintiffs allege violate sections 1 and 2 of the Sherman Act. The Motion seeks certification of classes of Alabama Plaintiffs because the Alabama claims will be tried first. In their brief supporting the Motion, the Providers argue that “(c)lass certification is merited in this case because the predominate facts are not only common to all class members but also largely undisputed. Questions regarding the legality of Defendants’ across the board conduct are necessarily common to every class member.”

The Blues do not dispute that they have designated exclusive service areas in which generally only the licensed Blue plan can sell or administer health insurance products; that healthcare providers can generally contract only with the Blue plan holding the Blue license in the area where the provider is located; that Blue Cross and Blue Shield of Alabama is by far the largest healthcare insurer in Alabama; or that under the Blue Card program, healthcare providers are paid the same rate for treating patients regardless of which Blue plan insures or administers a patient’s health benefits.

Providers’ brief details how the Provider Plaintiffs easily meet all of the requirements for class certification under Federal Rule 23, both with respect to the threshold requirements of numerosity, commonality, typicality, and adequacy of representation, and with respect to the specific requirements under Rule 23(b)(2),(3), and (4). With respect to the threshold requirements, the brief demonstrates that each class is sufficiently numerous to be treated as a class, that there are common questions of law and fact, that the named Plaintiffs’ claims are typical of the claims of class members, and that Provider Plaintiffs and Provider Plaintiffs’ counsel are adequate. For example, with respect to commonality, the brief argues that “(r)esolution of the common question of whether Defendants conspired to allocate markets and agreed to output restrictions will resolve a core question regarding the validity of each and every class member’s claim in one stroke.”

The brief also demonstrates that Provider Plaintiffs meet the specific requirements for certifying the damages classes under Rule 23(b)(3) because common questions of law and fact predominate over any individual questions regardless of whether the claims are analyzed under the per se standard, as the market allocation claims will be, or the rule of reason standard, as the price fixing claims will be. Moreover, the claims of all class members will be based on the same legal theories, will rely on the same evidence with respect to both liability and antitrust impact, and will seek the same relief.

In addition to damages, provider plaintiffs are seeking an injunction preventing the Defendants from entering into or enforcing any agreements that restrict the geographic area in which any Blue plan may compete and to enjoin the “Best Efforts” rules that restrict the Defendants’ non-Blue business. Injunctive relief is appropriate because “Provider Plaintiffs’ claims are based entirely on the premise that Defendants have acted on grounds generally applicable to the Classes by conspiring to allocate markets and agreeing to output restrictions…and by agreeing to fix prices, to boycott healthcare providers, and by conspiring to monopsonize, monopsonizing and attempting to monopsonize.”

Along with their brief, Provider Plaintiffs filed expert reports supporting the Motion for Class Certification.

Joe Whatley and Edith Kallas of Whatley Kallas, LLP are Co-Lead Counsel for the Provider Plaintiffs. The case, In re Blue Cross and Blue Shield Antitrust Litigation, MDL 2406, 2:13-cv-200000-RDP, is currently pending before Judge R. David Proctor in the United States District Court for the Northern District of Alabama.

Provider Plaintiffs’ full brief in support of the Motion was filed under seal. Provider Plaintiffs’ redacted brief filed on the public docket is linked here. Whatley Kallas, LLP’s earlier article on Judge Proctor’s decision determining that the Blues’ market allocation scheme and their “Best Efforts” restrictions on non-Blue business are to be analyzed under the per se standard of review is linked here. The earlier article on the Eleventh Circuit’s decision declining to hear the Blues’ interlocutory appeal of the standard of review decision is linked here. And, the earlier article on the procedural schedule for class certification and motions for summary judgment is linked here.