Appeals Court Unanimously Rules in Favor of Blue Cross; holds that Calhoun County was aware of access fees

June 7, 2012
DETROIT — A three-judge panel of the Michigan Court of Appeals yesterday unanimously overturned a $1.13 million judgment against Blue Cross Blue Shield of Michigan, finding that Blue Cross disclosed, and Calhoun County agreed to pay, fees that provided the County with access to discounted health care services.

The lawsuit challenged a fee that Calhoun County paid to Blue Cross in return for access to Blues Cross's best-in-state hospital network and to comply with state mandates.

The court held in a published opinion that the Blue Cross contract was valid in all respects, vindicating the position Blue Cross has strongly expressed and defended since these contractual provisions were first challenged in 2008. The Court ordered that all claims against Blue Cross be dismissed, stating "the parties unequivocally agreed to the payment of the Access Fee, what it covered, and how it would be paid."

The decision is the first in a series of appeals and should signal the end to similar baseless lawsuits against Blue Cross, lawsuits that could have ultimately forced Michigan residents across the state to pay more for health care services.

"This is a huge victory for us, as our position has always been that Calhoun County was aware of these fees and agreed to pay them," said Jeffrey Rumley, BCBSM vice president and general counsel. "This decision reaffirms that Blue Cross acted in good faith, that the County benefited tremendously from their contractual arrangement with us, and that there was appropriate disclosure. Blue Cross has litigated this and similar matters for years and has been steadfast in its position. We hope and expect that this decision will be the catalyst leading to all such matters being dismissed."

This fee resulted in substantial discounts for health care services and saved millions of dollars for Calhoun County and its taxpayers. The fee also funded state-mandated subsidies for health care premiums paid by Michigan senior citizens.

Blue Cross Blue Shield of Michigan is a nonprofit corporation and independent licensee of the Blue Cross and Blue Shield Association.