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 Aon Center, the Blue Cross Blue Shield Association headquarters inChicago | |
| Founded | 1929; 97 years ago (1929) |
|---|---|
| 13-5656874[1] | |
| Legal status | 501(c)(4) public welfare organization[1] |
| Location |
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| Coordinates | 41°53′11″N87°37′26″W / 41.8864516°N 87.6239771°W /41.8864516; -87.6239771 |
| Products | Health insurancePPOs andHMOs |
| Kim Keck[1] | |
| Subsidiaries | Health Services Foundation BC and BS Foundation on Health Care BCBSA Services Inc[1] |
| Revenue | $457,383,677[1] (2014) |
| Expenses | $449,635,361[1] (2014) |
| Employees | 1,253[1] (2014) |
| Website | www |
Blue Cross Blue Shield Association, also known asBCBS,BCBSA, orThe Blues, is a United States–basedfederation with 33 independent and locally operated BCBSA companies that providehealth insurance to more than 115 million people in the U.S. as of 2022.[2][3]
It was formed in 1982 from the merger of its two namesake organizations. Blue Cross was founded in 1929 and became the Blue Cross Association in 1960. Blue Shield emerged in 1939, and the Blue Shield Association was created in 1948. Its headquarters are at theAon Center at 200 E.Randolph Street inChicago, Illinois.[4]
BCBSA claims to control access to the Blue Cross and Blue Shield trademarks and names across the United States and in more than 170 other countries, which it then licenses to the affiliated companies for specific, exclusive geographic service areas.[5] It has affiliated plans in all 50 states, Washington, D.C., andPuerto Rico, and licensees offering plans in several foreign countries; it also participates in thenationwide health insurance program for employees of theUnited States federal government.[6]
BCBSA manages communications between its members and the operating policies required to be a licensee of the trademarks. This permits each BCBSA company to offer nationwide insurance coverage through its BlueCard provider network and claims reimbursement program even though it operates only in its designated service area.[5]
Blue Cross and Blue Shield developed separately. Blue Cross provided coverage for hospital services, and Blue Shield covered physicians' services.[7]
Blue Cross is a name used by an association ofhealth insurance plans throughout the United States. Its predecessor was developed byJustin Ford Kimball in 1929, while he was vice president ofBaylor University's health care facilities inDallas, Texas.[8] The first plan guaranteed teachers 21 days of hospital care for $6 a year, and was later extended to other employee groups in Dallas, and then nationally.[8] TheAmerican Hospital Association (AHA) adopted the Blue Cross symbol in 1939 as the emblem for plans meeting certain standards. In 1960, the AHA commission was superseded by the Blue Cross Association. Blue Cross severed its ties with the AHA in 1972.
Blue Shield was developed by employers in lumber and mining camps of the Pacific Northwest to provide medical care by paying monthly fees to medical service bureaus composed of groups of physicians.[9][10] In 1939, the first official Blue Shield plan was founded in California. In 1948, the symbol was informally adopted by nine plans called the Associated Medical Care Plan, and was later renamed the National Association of Blue Shield Plans.
In the 1960s, theU.S. government chose to partner with Blue Cross and Blue Shield companies to administerMedicare.[10]
In 1982, Blue Shield merged with The Blue Cross Association to form theBlue Cross and Blue Shield Association (BCBS).[11]
Prior to 1986, organizations administering BCBS were tax exempt under501(c)(4) as social welfare plans. However, theTax Reform Act of 1986 revoked the exemption because the plans sold commercial-type insurance. They became 501(m) organizations, subject to federal taxation, but entitled to "special tax benefits"[12] under IRC 833.[13]
In 1994, BCBS changed to allow its licensees to be for-profit corporations.[7] During 2010,Health Care Service Corporation, the parent company of BCBS in Texas, Oklahoma, New Mexico, Montana and Illinois, nearly doubled its income to $1.09 billion in 2010, and began four years of billion-dollar profits.[14] In the final spending bill for FY 2015 after much lobbying since 2010, nonprofit Blue Cross and Blue Shield plans continue to have special tax breaks that were understood to be threatened by theAffordable Care Act of 2010.[15]
Blue Cross and Blue Shield insurance companies arelicensees, independent of the association and traditionally of each other,[16] offering insurance plans within defined regions under one or both of the association's brands. Blue Cross Blue Shield insurers offer some form of health insurance coverage in every U.S. state. They also act as administrators[17][16] ofMedicare in many states or regions of the U.S.
The Blue Cross Blue Shield Federal Employee Program (FEP) is a nationwide option under theFederal Employees Health Benefits Program (FEHB) for U.S. federal government employees and retirees and has been part of FEHB since FEHB's inception in 1960.[18] FEP enrolls over half of the federal workforce, with over 5 million members, making it the largest insurer of federal employees and the largest single health plan group in the world.[5][18][19][20]
The association is headquartered in theMichigan Plaza complex in theChicago Loop area of Chicago, Illinois.[21]
Single-state members include the following organizations.
Blue Cross Blue Shield of Arizona (BCBSAZ) is a non-profit healthcare organization founded in 1939.[24] BCBSAZ partners with non-profit "Discovery Triangle Development Corporation" to launch a Farm Express mobile market (formerly Fresh Express).[25]
Founded in 1948,[26] Arkansas Blue Cross Blue Shield (ABCBS)[27] is an independent licensee of the Blue Cross Blue Shield Association, and the largest healthcare provider in the state.[28] It donated $1.98 million to The Walton College of Business toward founding its Robert L. Shoptaw Master of Healthcare Business Analytics Program.[29] In August 2022, more than 12,000 members of Arkansas Blue Cross were affected by a ransomware attack on a former affiliate, North Highland Company, LLC.[30]
Blue Cross of Idaho and Regence BlueShield Idaho[31] are separate companies and compete throughout the state.
Blue Cross and Blue Shield of Kansas (BCBSKS) was founded in 1942 by Sam Bartham,[32] later becoming an independent licensee of the Blue Cross Blue Shield Association.[33]
Blue Cross Blue Shield of Louisiana is a tax-paying non-profit that was founded in 1934 inNew Orleans. An independent licensee of the BCBSA, it is a privately held mutual company without shareholders, which is wholly owned by its policyholders.[34]
Blue Cross Blue Shield of Minnesota (BCBSMN) was founded in 1933, with 3,500 employees reported in 2022.[35]
Blue Cross Blue Shield of Mississippi (BCBSMS) was formed as a privately held company in 1954. In 1948, it was converted to a non-profit. In 1973, its name was changed from Mississippi Hospital and Medical Service to Blue Cross & Blue Shield of Mississippi, Inc., which, in 1996, was converted from a non-profit membership corporation to a mutual insurance company, with the name again changed, to Blue Cross & Blue Shield of Mississippi, A Mutual Insurance Company.[36] During 2022, BCBS andUniversity of Mississippi Medical Center (UMMC) network entered conflict over who is to blame for an increasing lack of covered care in the state.[37] Media reported that UMMC had paid close to $279,000 for digital advertising, commercials, and billboards to attack BCBS, which, in subsequent months, sued the hospital for defamation.[38] In December 2022, UMMC and BCBS reached a new contractual agreement.[39]
Blue Cross Blue Shield of Nebraska was founded in 1939.[40] On July 1, 2018, BCBS Nebraska formed GoodLife Partners Inc., a mutual holding company, to conduct its noninsurance businesses. The company retained the Blue Cross brand, converting from mutual ownership to a stock company wholly owned by GoodLife.[41]
Excellus BlueCross BlueShield (Excellus BCBS, orExcellus) is anon-profithealth insurance company headquartered inRochester, New York. It is part of the Blue Cross Blue Shield Association. In 2010, Excellus wasUpstate New York's largest nonprofit health plan.[42]
In 2001, Excellus merged withUnivera Healthcare, (formerlyNorth AmeriCare), based inBuffalo, New York. Univera retained its name and is separate from Excellus BCBS.[43][44][45] Excellus was the target of a cyberattack in 2015, in which 10.5 million records were hacked, and cost the company 17.5 million dollars.[46] The company's Blue Cross Blue Shield subsidiaries have been known as:[47]
By September 2010, BCBS licensee Blue Cross and Blue Shield of North Carolina announced that it would refund $156 million to their policyholders[48] followingdocumented charges: they had been sued and fined for denying due medical treatments to their customers and for underpaying doctors.[49][50] As of 2019 they were overseeing well over half of all payments for medical services in their state.[51] BCBSNC invests in chronic and underlying condition research,[52]telehealth[53] andartificial intelligence (AI) fordigital healthcare.[54]
In 2019, Blue Cross and Blue Shield of North Carolina agreed to enter into a partnership withCambia Health, but cancelled the agreement later that year.[55] Dr.Patrick H. Conway, who had served as CEO from 2017, was scheduled to become CEO of the merged company, replacing retiring Cambia CEO Mark Ganz, but resigned after aDWI arrest in June 2019, putting the merger on hold.[56]
Though historically "Blue Cross" was used for hospital coverage while "Blue Shield" was used for medical coverage,[57] today that split only exists for traditional health insurance plans inPennsylvania. Two independent companies operate in central Pennsylvania, Highmark Blue Shield inPittsburgh and Capital Blue Cross in Central Pennsylvania. In southeastern Pennsylvania,Independence Blue Cross inPhiladelphia has a joint marketing agreement with Highmark Blue Shield in Pittsburgh for their separate hospital and medical plans. However, Independence Blue Cross, like most of its sister Blue Cross Blue Shield companies, cover most of their customers under managed care plans such as HMOs and PPOs which provide hospital and medical care in one policy.
Blue Cross & Blue Shield of Rhode Island was founded in 1939.[58] The insurer is headquartered inProvidence, Rhode Island.
BlueCross BlueShield of the U.S. Virgin Islands is administered by BlueCross BlueShield of Puerto Rico.[59]
Blue Cross Blue Shield of Wyoming (BCBSWY) is a non-profit founded in 1945.[60] In 2022, BCBSWY penned opposition to the Pharmacy benefit managers act enhancements (Wyoming Senate File 0036).[61]
While only some members retain nonprofit status, the ones that do have been criticized for holding excessive amounts of cash or excessive executive compensation. For instance, the CEO of BCBS Michigan, Daniel Loepp, earned over US$19 million in 2018, more than the CEO of Ford or Fiat Chrysler during the same year.[62]
In 2014, BC/BS of Illinois (Health Care Service Corporation) was sued over its nonprofit status. The lawsuit wasdismissed, with prejudice, and the dismissal ruling was upheld on appeal.[63] Similar suits occurred with similar results in other states such as Oregon.[64]
Conversions into for-profit corporations typically results in distribution of some of the assets into acharitable foundation. When Blue Cross of California was converted, it initially had no distribution, but subsequently The California Endowment andCalifornia Health Care Foundation were endowed with $3.2 billion.[65] Proceeds ranged from $3.2 billion (California) to $1.5 million (Nevada).[66]: 63
An exceptional case occurred in the Empire Blue Cross conversion, where the proceeds went to fund wage increases for union workers.[67]
In 2022, the group of 34 companies that make up the BCBS Association settled anantitrust investigation by allowing competition among member companies under non-Blue names while retaining regional exclusivity for regional licenses.[68]
In October 2024, BCBS settled aclass-action antitrust lawsuit first brought in 2012 by physicians, hospital systems, and other providers who alleged that they had been underpaid for insurance reimbursements, with BCBS agreeing to pay $2.8 billion to resolve the claims, in the largest healthcare antitrust settlement to date.[69]
In 2018, Robert Salim was diagnosed with stage 4 throat cancer, however, theproton therapy ordered by his doctor was denied by Blue Cross Blue Shield. Salim sued.[70] In July 2022 the United States District Court, Western District of Louisiana ruled that "Because Salim showed that PBT was a nationally accepted standard of care for advanced head and neck cancer in 2018, BCBSLA abused its discretion in finding Salim's PBT treatment was not medically necessary."[71] AProPublica investigation found that Blue Cross and Blue Shield of Louisiana used guidelines from an outside company called AIM Specialty Health to reject appeals for denial, and that this practice was widespread.[70]
In August 2024, BCBS of Illinois, Texas, New Mexico, Montana, and Oklahoma changed their surgical anesthesia reimbursement policy to remove additional payments for medically complex patients, a move which the company said would streamline costs. This move was strongly denounced by the American Society of Anesthesiologists.[72]
In November 2024, it was announced that BCBS of New York, Connecticut, and Missouri would cease to cover the cost of anesthesia for surgeries which exceeded a time limit based on data from the Centers for Medicare and Medicaid Services, regardless of the time actually required for the surgery.[73][74] Anthem argued that there was evidence of overbilling fraud by anesthesiologists, patients wouldn't have to pay if their operations went overtime, and that anesthesiologists could appeal for payment in the event that their operation went over the limit for out of medical necessity.[75] TheAmerican Society of Anesthesiologists decried this move, calling it a “money grab” and “commercial health insurers looking to drive their profits up at the expense of patients”.[76] This move was later canceled the day after the assassination of UnitedHealthcare CEOBrian Thompson which caused the policy to receive renewed backlash online, though there is no direct evidence linking either event to the cancelation due to backlash existing before the shooting.[77][78][79]
A week after the shooting, a woman inLakeland, Florida was arrested and charged after allegedly saying "Delay, deny, depose, you people are next" to a line representative after her claim was denied.[80] The judge set her bail at $100,000, citing "the status of our country at this point".[81]
As of January 1, 1987, the federal government removed the full tax-exempt status of BCBS plans and instead created a special tax class for BCBS organizations, Internal Revenue Code ("I.R.C.") 5833. That I.R.C. category subjected BCBS plans to federal taxation but recognized the unique role BCBS plans play, unlike commercial for-profit insurers, and entitled it to special tax benefits.
GAO said since 2000, Blue Cross Blue Shield has become a behemoth in the federal employee insurance market. The company was the largest carrier in 93 percent of counties in 2000, and that proportion grew to 98 percent in 2015. Over that same time period, Blue Cross Blue Shield grew its median county market share from 58 percent to 72 percent.
BCBSA's large program market share—66 percent of total program enrollment in 2015
| International | |
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| National | |
| Other | |
