Blue Cross Blue Shield Antitrust Settlement Limits Employer’s Suit Against Third-Party Administrator
On November 18, 2024, Owens & Minor, Inc. (OMI), a business that sponsors a self-funded healthcare plan for its employees, filed suit against Anthem Health Plans of Virginia, in its role as third-party administrator (TPA), claiming Anthem withheld information and engaged in financial misconduct, and challenging the function of the BlueCard program. On April 22, 2025, Chief U.S. District Judge R. David Proctor issued an injunction stopping the case due to the settlement terms of a previous class action antitrust lawsuit against Blue Cross Blue Shield (BCBS).
Lawsuits like the OMI case over the administration of healthcare benefits are becoming more common, and transparency issues and failure to fulfill fiduciary duties are at the heart of these cases. These cases highlight the importance of price transparency rules issued by HHS in the final months of the first Trump administration, which allow employees and employers to compare what they pay for healthcare to what others in the market are paying.
The Blue Cross Blue Shield Antitrust Suit
The settlement of the antitrust lawsuit brought by a class of behalf of tens of millions of subscribers against Blue Cross Blue Shield antitrust suit has affected OMI's ability to pursue a suit against Anthem.
This earlier case began in 2012, when a class of subscribers and providers accused BCBS of limiting competition and product development in violation of the Sherman Antitrust Act. The primary claim was that BCBS divided the country into service areas run by subsidiaries, and prevented the local subsidiaries from competing in those areas. It was also claimed that the BlueCard program violated antitrust laws by fixing prices paid to health care providers.
The court approved the settlement for subscribers in August 2022, and for providers in December 2024. Any parties that did not approve of the settlement could opt out. OMI, one of the members of the subscriber class, did not opt out.
The settlements allow large national employers to request bids from multiple Blues plans (where previously BCBS affiliates were prevented from competing with each other), and rescinded a BCBS rule that required affiliates to generate at least 66% of revenue from Blues-branded businesses, which should encourage the development of non-Blues business, helping to create competition. BCBS agreed to pay $2.8 billion to a settlement fund as part of the deal and make significant changes to its BlueCard program.
The OMI Suit
On November 18, 2024, OMI filed a complaint against Anthem in the Eastern District of Virginia. Anthem serves as a third-party administrator for OMI’s Employee Retirement Income Security Act (ERISA) plan. Anthem is an affiliate of BCBS, operating independently but under the BCBS brand. BCBS, like most large health insurance companies, offers TPA services, such as managing employee enrollment and benefits, processing claims, providing customer service, and managing a network of providers, through divisions of their parent company.
When large employers like OMI choose to use their own funds and assets to pay the claims for their enrollees (the "self-funded" or "self-insured" approach), the employer typically contracts with a TPA and the employer assumes the financial risk for providing the health insurance benefit, with the arrangements primarily being governed by the federal Employee Retirement Income Security Act. This arrangement differs from a “fully-insured” plan, where the employer pays monthly premiums to the insurer for a standardized product, and the insurer bears the risk for all claims. As we reported in September 2024, there is an increasing trend by employers suing insurers to determine what their employees' healthcare really costs, and to ensure insurers are acting as good stewards of workers' health benefits. This is especially true for “self-funded” employers who use their own funds and assets to pay the claims for their enrollees, but rely on TPAs (who are usually run by large health insurance companies) to manage employee enrollment and benefits, process claims, provide customer service, and manage a network of providers.
The suit claims Anthem mismanaged OMI's plan and breached its ERISA fiduciary duties. As part of an audit in September 2021, OMI requested employee health claims data, but according to the suit, Anthem “transformed what should have been a simple transfer … into a nearly two-year game of ‘hide the ball'” engaging in conduct to deliberately obscure financial details.
When a limited portion of the data finally arrived, OMI claims that the data shows “tens of millions of dollars of damages to the plan as a result of defendant’s neglect and misconduct” including “paying more for health care claims than was even billed, securing kickbacks from providers, double-paying claims and pocketing rebates belonging to plaintiff”.
Additionally, the complaint took issue with the BlueCard program, which allows members of one Blue Cross and Blue Shield plan to receive healthcare benefits while traveling or living in another BCBS plan's service area. BCBS developed the BlueCard program so patients can access care in another Blue’s service area without being subject to out-of-network costs. OMI claims that the BlueCard program allows BCBS to increase revenues partially through retained hidden fees. OMI claims this program led to higher costs and a lack of transparency, because plan sponsors wouldn’t know the true costs of the plan.
On April 22, 2025, a federal judge issued an injunction against OMI pursuing the current case against BCBS due to the terms of the BCBS antitrust settlement, which included an agreement not to sue BCBS over the national BlueCard program. The terms of the injunction against OMI include an option for OMI to either amend the suit to omit any claims that reference the BlueCard program or drop the case entirely.
The OMI Suit Follows Similar Suits by Employers
Similar suits have been filed by self-funded employers claiming breaches of fiduciary duties. McKool Smith, for example, has filed four separate cases against Aetna on behalf of Kraft Heinz, Aramark Services, W.W. Grainger, and Huntsman International. The primary claim in all of these cases is that Aetna violated its fiduciary duties under ERISA, and that by approving payment for false, fraudulent, duplicative, and improper claims, which are drawn from the employer's funds, Aetna cost the employers millions in claims "that never should have been paid". The cases state that "it is Aetna's responsibility as TPA to identify instances where billing errors are apparent in a claim for reimbursement" and that Aetna was responsible for the approval and payment of "only those claims that are legitimate, not those that are fraudulent or otherwise improper and otherwise fail to satisfy the requirements of the Plans. All other claims for payment must be denied." The cases also state that not recouping overpayments further breaches fiduciary duties.
The Big Picture
Even without the claims against the BlueCard system, OMI still has significant potential grounds for its suit against Anthem if the claims about Anthem mismanaging healthcare payments and attempting to hide the data prove true. Employers paying for self-funded insurance coverage are increasingly likely to be concerned about where their money is going, and will be looking for more transparency. If plan providers are not forthcoming with this information, more suits like this would seem likely.
While the case is paused until OMI addresses the issues in the injunction, this is one example of the multiple types of cases implicating BCBS. These have included suits by employers questioning the practices of the third-party administrators (TPAs), suits by subscribers and providers based on antitrust issues, and suits by employees targeting employers for not properly monitoring the actions of the TPAs.
All of these cases speak to the complexity surrounding contemporary business practices in paying for healthcare. Parties include employees, employers, providers, insurance companies, and third-party administrators. Each of these parties relies on the honesty and fairness of the others, but without adequate transparency, distrust seems inevitable. And as healthcare costs keep rising, it becomes more imperative for parties to ensure they are not overpaying for services. The result ends up being the potential for lawsuits, and while the suits listed here deal with similar issues, they represent how different participants are concerned for their piece of the healthcare puzzle.