Lawsuit Cases & Settlements

[updated 3/17/2020]

RICHARDSON, T.X.—Blue Cross Blue Shield of Texas (BCBSTX) agreed to repay customers after state regulators discovered that the insurer supplied them with incorrect information and mishandled out-of-network emergency claims. On March 6, 2020, the Texas Department of Insurance (TDI) revealed that BCBSTX will pay a $10 million fine.

TDI Commissioner Kent Sullivan stated, “Consumers who had higher out-of-pocket costs due to the errors will get refunds. Ensuring the fair treatment of consumers and clear, timely consumer information are priorities for TDI.”

Deceptive Marketing and Billing Practices

Back in August 2018, Texas consumers began complaining to the agency about significant problems in handling out-of-network claims for emergency room visits. TDI found that BCBSTX was creating unnecessary delays related to a new review system that it implemented around the same time.

TDI also uncovered inaccurate and misleading information in marketing materials and consumer notices.

As one example, nearly a half million Texans received a document that incorrectly advertised price and coverage information. More than 90,000 people were provided an explanation of benefits (EOB) in 2018 and 2019 that was erroneous, as well.

In 2019, the Houston Chronicle featured the story of a woman named Brittany Parsons, who received a bill for more than $35,000 in out-of-network expenses while covered by her husband’s BCBSTX HMO plan.

All but three percent of her bills were paid, which was her responsibility, according to BCBSTX. Ms. Parsons appealed the claim three times before exhausting all internal resolution methods. She was one of thousands who filed a formal complaint.

BCBS Routinely Faces Antitrust Lawsuits at the National Level

Consumers are protected under Texas and federal antitrust laws, which prohibit companies from engaging in practices that create unfair competition. While most cases generally feature coercion or monopolies, the BCBSTX matter is interesting since antitrust can extend to deceptive marketing practices.

This decision comes just months after a string of antitrust lawsuit settlements throughout the nation.

BCBSTX was ordered to contact affected customers who received the misinformation and send them consumers notices by or before May 1, 2020. Consumers will have up to 60 days to respond and receive a refund thereafter. However, victims can obtain additional monetary awards through the civil court system if other financial and physical losses occurred as a result.

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