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Federal Court Rejects BCBSM’s “Schedule A” Argument

May 8, 2015

In a recent decision in one of the many cases against Blue Cross Blue Shield of Michigan seeking return of hidden administrative fees, a federal court rejected one of BCBSM’s primary arguments. BCBSM has consistently argued that businesses “knew or should have known” about the fees that BCBSM hid, but courts have consistently rejected the argument, including Judge Steven Murphy’s recent decision.

BCBSM’s argument relies upon a document (called a Schedule A) that BCBSM gave to its customers at the beginning of each year, which said that the customer may be charged certain fees in the upcoming year. However, during and after the year, BCBSM gave the customer documents indicating that the fees were not, in fact, charged. The opposite was actually true: BCBSM had been taking the fees all along. As Judge Murphy explained: “BCBSM cannot cite ambiguous forward-looking language from the Schedule A, subsequently conceal the extent of the administrative fees charged in the settlement and reporting documents it later provided to [plaintiffs], and then rely on the Schedule A language to argue that [plaintiffs] knew or should have known about the disputed fees.”

BCBSM took administrative fees from self-insured customers between 1994 and approximately 2011. Judge Murphy’s decision is one of the many rulings that has allowed self-insured businesses to obtain return of the hidden fees.

In 2013, Varnum successfully represented a client against Blue Cross Blue Shield of Michigan in a matter that involved millions of dollars in illegal hidden access fees. The practice was widespread and Varnum has now represented more than 60 clients in similar litigation against BCBSM. These case updates serve as a record of Varnum’s activity on behalf of our clients in these matters.

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