As described in a prior blog post, dozens of employers have sued Blue Cross Blue Shield of Michigan (BCBSM) over allegations that it breached its fiduciary duty as health plan administrator by failing to disclose fees and surcharges it reimbursed itself from billed claims. As reported in Crain’s Detroit Business, a recent decision from the U.S. Sixth Circuit Court of Appeals paves the way for those lawsuits to move forward – much to BCBSM’s dismay.
In Hi-Lex Controls Inc. v. Blue Cross Blue Shield of Michigan, a case which went to trial last May, U.S. District Court Judge Victoria Roberts of the Eastern District of Michigan ruled against the BCBSM and awarded $5.1 million in damages to Hi-Lex (the plaintiff-employer). While BCBSM argued that Hi-Lex’s claims were barred by the statute of limitations, Judge Roberts found that because BCBSM fraudulently concealed its wrongful activity, it was appropriate and necessary to toll the limitations period so has to allow Hi-Lex to pursue damage claims going back more than a decade.
BCBSM appealed Judge Roberts’ decision, and the U.S. Secretary of Labor filed a brief urging the appeals court to uphold her ruling. On May 14, 2014 the Sixth Circuit affirmed Judge Roberts’ decision preserving the multimillion-dollar damages award against BCBSM.
This is good news for all employers who contracted with BCBSM to administer their medical insurance programs and who may have also been a victim of BCBSM’s fraudulent billing practices. Such employers now have the opportunity to pursue claims for money damages.
Sommers Schwartz attorneys continue to actively investigate claims by employers who maintained self-funded medical insurance plans for their employees and retained BCBSM as their plan administrator. If you believe that your company may have been the subject of BCBSM’s fraudulent practices, you should immediately contact Dan Swanson or Jason Thompson to discuss pursuing a money damage claim against BCBSM.