$30,400,000 Awarded Regence BlueShield Subscribers in Washington State.

Health/Medical Writers

SEATTLE--(BW HealthWire)--March 20, 2001

Regence BlueShield in Washington State subscribers who paid for visits to chiropractors, massage therapists, naturopaths, acupuncturists, and nutritionists are eligible to claim a piece of $30,400,000 awarded in two class action lawsuits settled last week. Court papers to have the arbitrated settlement approved by the courts were filed today.

The lawsuits cover more than one million people insured with Regence BlueShield -- the largest health insurer in the State of Washington--between January 1, 1996 and February 29, 2000.

Attorneys Richard Spoonemore and Jonathan Meier of the Seattle law firm Sirianni & Youtz, who have brought a number of class action suits to enforce the requirements of Washington's "every category" law, represented class members throughout this landmark case against Regence.

"The victors in this six-year legal battle are Regence subscribers," said Spoonemore. This arbitrated settlement will allow Regence subscribers who were told that they had no coverage for alternative care to obtain reimbursement for care that should have been covered under the law."

Since January, 1996, all people insured by health plans in this state have had the right to choose the category of licensed health care provider which best meets their individual health care needs. The "every category" law, allows people to obtain treatment for medical conditions from both traditional and non-traditional providers. The law is both unique in the nation and at the heart of Washington State health care reform.

The attorneys for the class members and for Regence filed papers today asking for court approval of the settlement. As part of the settlement, the courts will be asked to approve a process whereby class members can submit claims and be reimbursed for their out-of-pocket expenditures on alternative care.

Under the process requested by the parties, any Regence subscriber who received treatment from an alternative provider and paid for that treatment out-of-pocket during the specified timeframe can make a claim. Notices and claim forms would be sent out to all subscribers 60 days after court approval. Subscribers would then have 120 days to send in their claims.

Regence Blue Shield subscribers can visit the Web at www.altcarelaw.com for claim forms and additional information on the suit.

The settlement also requires Regence to use any unclaimed funds, expected to be in the millions, to reduce health insurance premiums on all its policies subject to the every category law over a five-year period. "This will provide a further benefit to class members and Regence insureds," Meier said.

Spoonemore said that Regence had historically opted to cover services rendered by alternative care providers only in "managed care" plans (where patients must go through a gatekeeper to get specialized treatment), which left two-thirds of their subscribers paying for alternative treatment out of their own pockets. In addition, Regence often excluded entire categories of providers, such as chiropractors, on its managed care plans as well.

"The `every category of provider' law is a non-discrimination statute. Any exclusion must be based purely on whether a service is efficacious or cost-effective, not on which licensed category of provider is performing the service, or on a health carrier's preconceived notion of which treatments are effective," said Spoonemore.

Regence adopted a different interpretation of the law in 1995. Until this settlement, Regence continuously battled its insureds and the Washington State Insurance Commissioner over the legality of its compliance with the law.

In January 2000, the class members obtained a unanimous decision from the Washington Supreme Court that Regence had been acting illegally when it refused to provide access to alternative providers on all its non-managed care plans. Although Regence changed its policies on March 1, 2000 in response to the Washington Supreme Court's decision, Regence maintained that it had no obligation to reimburse its subscribers who, since 1996, had received care from alternative providers.

After a federal court held Regence liable for these past amounts, Regence agreed to establish a fund to compensate its past and present subscribers for the alternative care that it excluded -- or would have excluded if a claim had been made -- between January 1, 1996 and February 29, 2000. The parties agreed to use an independent arbitrator to determine the magnitude of the payback amount.

"We are pleased that Regence was willing to enter into an agreement that created a settlement fund based upon an objective assessment of how much its subscribers had spent on unreimbursed alternative care," said Meier.

(For more information on this lawsuit and claim forms, visit the Web at altcarelaw.com)