Owens & Minor Sues Anthem Over Mismanaging Health Plan, Lack of Transparency

Owens & Minor Inc., a health care logistics company, filed a complaint against Anthem Blue Cross and Blue Shield on Monday, claiming that the third-party administrator refused to provide necessary claims data and overpaid certain claims on behalf of the plan sponsor, resulting in unnecessary costs.

The case, Owens & Minor Inc. et al v. Anthem Health Plans of Virginia Inc., is yet another example of the increased scrutiny fiduciaries have been facing over their management of health plans—though two separate complaints filed earlier this year were filed against the plan sponsors, not third-party administrators. Under the Consolidated Appropriations Act of 2021, plan sponsors are required to attest that their fees for health care plans are fair and reasonable for the services provided. The CAA also includes regulation about transparency and the removal of gag clauses on data sharing with plan sponsors, among other things.

According to an earlier lawsuit, filed in U.S. District Court for the Eastern District of Virginia in September 2021, Richmond, Virginia-based Owens & Minor—the plan sponsor and named fiduciary and administrator of the plan—requested that Anthem provide its plan data so that Owens could ensure the insurance company was “faithfully administering the plan’s assets.” Owens hired Anthem in 2017 as its third-party administrator to help administer its self-funded plan and to manage health care claims.

As the plan’s TPA, the lawsuit argues that the plan entrusted Anthem with its plan assets with the level of care and loyalty required under the Employee Retirement Income Security Act.

2-Year Game of ‘Hide the Ball’

According to Monday’s complaint, following Owens’ request for data, Anthem engaged in a nearly two-year game of “hide the ball,” as it first claimed it could not provide the data and then said it would not.

After months of requesting the information, Anthem informed Owens that Anthem would not release the data, because it might expose confidential discounts and payment contracts aligned with each provider, according to an email screenshot included in the legal filing.

Owens then engaged outside counsel to take steps to obtain the data, and in August 2022, Anthem agreed to provide the requested data, subject to the execution of a confidentiality agreement.

“[Anthem’s] actions hindered [Owens’] ability to carry out its own fiduciary duties to the plan, plan participants, and beneficiaries as they relate to monitoring and assessing [Anthem’s] claims management practices and performance of its fiduciary duties,” the complaint states. “In other words, only [Anthem] itself had the capability to determine whether it was meeting ERISA’s standards.”

In December 2023, Owens sued Anthem to obtain access to its plan’s claims data. Owens now has a portion of that data and, according to the latest allegations, an analysis of the data revealed that Anthem used plan assets for its own purposes and used funds to “enrich itself and its affiliated companies and medical providers.”

Anthem is accused of paying more for health care claims than was billed, securing kickbacks from providers, double-paying claims and pocketing rebates belonging to Owens.

Issues With BlueCard Program

In addition, the complaint points out issues with the BlueCard program, a national program that enables members of one Blue Cross and Blue Shield plan to obtain health care services while traveling or living in another BCBS plan’s service area. Owens argued in the lawsuit that the Blue Cross Blue Shield Association devised this program to increase Blue Cross and Blue Shield revenue in part through “hidden fees” that would be retained, distributed among Blue Cross and Blue Shield affiliates, and paid to the association.

Owens alleges the BlueCard program led to inflated costs and a lack of transparency, keeping the plan sponsor in the dark about the true cost structure of the plan.

The current lawsuit is intended to recover its losses and “claw back” Anthem’s “ill-gotten” gains, according to the filing. Owens is represented by Commonwealth Law Group, and representation for Anthem has not yet been named. A spokesperson at Anthem said they will not comment on active litigation. 

With a plan sponsor suing its third-party administrator, this case differs from previous health benefits-related lawsuits filed by participants against plan sponsors, including against Wells Fargo & Co. and Johnson & Johnson.

The Federal Trade Commission has also been focused on issues of pricing and transparency in health care benefits. It conducted an investigation into the big three pharmacy benefit managers, criticizing them for opaque practices and inflating the prices of prescription drugs. The FTC sued Optum Rx (UnitedHealth Group), Caremark (CVS Health) and Express Scripts (Cigna Group) in September.