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Court rejects $30M settlement of Blue Cross suit

The Detroit News

A U.S. Appeals Court has rejected a $30 million settlement of a lawsuit that accuses Blue Cross Blue Shield of Michigan of price fixing.

The 6th U.S. Circuit Court of Appeals ruled Tuesday that patients, employers and insurers never had a chance to review the deal.

The Cincinnati-based appellate court said the U.S. District Court in Detroit had erred in sealing too much of the court record.

“Class members who sought to object to the proposed settlement thus had no ability to examine the basis of what they were objecting to,” wrote Circuit Judge Raymond Kethledge, speaking on behalf of the court.

The Appeals Court ordered the court records unsealed and sent the case back to U.S. District Court in Detroit.

The class-action lawsuit could affect 3 million to 7 million people, according to the court’s opinion.

The legal case involves an agreement where Blue Cross raised the rates it would pay hospitals if they agreed not to charge other insurers lower rates.

In 2010, the U.S. Department of Justice sued Blue Cross over the practice, saying it violated federal antitrust laws.

Patients, employers and insurers then filed a series of lawsuits against the company.

In 2013, the federal government dropped its lawsuit after the state of Michigan passed a law banning such agreements. The private lawsuits continued.

In 2014, Blue Cross agreed to pay $30 million with roughly half the amount going for legal fees and expenses.

An expert for the plaintiffs had earlier filed a report saying the agreement caused damages of $118 million.

Some patients, employers and insurers objected to the $30 million settlement, saying they couldn’t determine whether it was fair because so many documents had been sealed.

But, in 2015, U.S. District Judge Denise Hood approved the settlement.

A spokeswoman for Blue Cross said Tuesday the company is reviewing the appellate court’s decision and hopes to eventually resolve the case.

A lawyer for the plaintiffs wasn’t immediately available for comment.