Plan Subscribers v Blue Cross & Blue Shield of Rhode Island
Blue Cross Settles Claims Processing Case for 17.5 Million, As Many as 1 in 10 Rhode Islanders May be Affected
Blue Cross & Blue Shield of Rhode Island has settled two class-action lawsuits for $17.5 million in connection with claims processing practices that allegedly reduced subscribers' benefits and increased their out-of-pocket expenses for several years. UnitedHealthcare of New England settled a smaller, but similar case in 2002 for $4.4 million. Blue Cross explained its settlement as a way to "avoid the cost and uncertainties of trial and possible appeals," and to expedite payments to the affected people. Blue Cross also said it does not expect this to affect its reserves or increase rates or premiums. The bulk of the payout will go to an estimated 115,000 former and current subscribers, who will get $10 to $2,500, or an average of about $95 each.
Court hearings were scheduled to take place January 19, 2005 to finalize the settlement. Then plaintiff's attorneys will begin the process of locating and contacting all the people eligible for payment. Each will get a letter, and there will also be ads in the local press, a Web site and a toll-free number. "Hopefully by summertime, the disbursements will occur," one plaintiff's attorney said. "But what's great about this settlement is that the class members will receive the payment without a cumbersome claims process" – they'll just get the checks automatically.
