Labor unions renew legal fight against BCBS Massachusetts over alleged overpayments

The Massachusetts Laborers' Health and Welfare Benefit Fund is suing Blue Cross Blue Shield of Massachusetts again for allegedly overcharging for healthcare and administrative services as the fund's third-party administrator. 

The fund is a self-funded health plan for union members and first contracted with BCBS as a TPA in 2006 to access discounted rates within the payer's provider network, according to a Sept. 26 complaint filed in a Massachusetts state court. 

"In reality, the BCBSMA provider contracts allow BCBSMA to pay claims on behalf of its self-funded plan clients using whatever contract payment provision that best suits BCBSMA's financial interests," the plaintiff's attorneys wrote. The complaint also alleges the payer purposefully hid and adopted internal policies that allowed it to pay claims inconsistent with the contract it had with the labor fund.

The fund previously sued BCBSMA in 2021 for similar reasons, alleging the company violated its fiduciary duties under ERISA by prioritizing "its relationships with healthcare providers and its own bottom line" when pricing claims.

A federal court and the First Circuit Court of Appeals ultimately determined that BCBSMA was not acting as a fiduciary to the fund in that case. The new case alleges a breach of contract and violations of state law, including unfair and deceptive business practices.

"The allegations in this complaint are identical to a similar complaint the Laborer's Fund pursued unsuccessfully in federal court," BCBSMA told Becker's in a statement. "BCBSMA prides ourselves on our best-in-class claim pricing and sophisticated and comprehensive payment integrity program, both of which help drive health care affordability. We believe this latest litigation effort continues the flawed and inaccurate agenda being pushed by the Fund's third-party vendor. We will continue to vigorously defend ourselves against the claims and are confident that the action will lead to a similar result in state court as obtained in federal court."

In the last year, lawsuits from large, self-insured employers or health plans have been filed against insurers in an effort to access complete medical claims data and fulfill fiduciary duties under federal law.

In June, Kraft Heinz alleged Aetna has used its role as its TPA "to enrich itself to Kraft Heinz's detriment" through undisclosed fees and processing medical and dental claims without human review, therefore violating its fiduciary duties to Kraft. In December 2022, bricklayer and metal worker unions filed a lawsuit against Elevance Health, alleging the payer does not allow self-insured plans to access their own claims data and charges the plans higher rates than it had negotiated with hospitals.

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