A growing number of healthcare providers are opting out of class action settlements—and with good reason.
In the landmark $2.8 billion Blue Cross Blue Shield (BCBS) antitrust settlement, health systems like the University of Pennsylvania Health System, MedStar Health, and Geisinger chose not to accept the generic terms applicable to a broad class action settlement.
Instead, they opted out of the class action and pursued individual litigation tailored to the specific harm they experienced. Their decisions reflect a larger shift in thinking: as payer behavior becomes more aggressive and reimbursement rates decline, providers are looking for smarter, more strategic paths to healthcare revenue recovery.
This shift raises an important question: Should your practice participate in a class action like the Blue Cross class action, or take the path of individual litigation? The answer depends on your healthcare revenue recovery goals, your potential claim value, and how much you want to influence the outcome. This blog outlines the key considerations to weigh as you decide what path makes the most sense for your organization.
It is critical to note that class actions often include broad release language that can impact your ability to bring future claims against a payer, even those unrelated to the original harm pursued in the class action. Understanding the full scope of these releases is essential before deciding whether or not to opt out.
Consideration #1: How Much Revenue Is at Stake?
For many providers, the first and most practical question is: What kind of revenue recovery is realistic?
Class actions are inherently broad. They aim to settle disputes for large numbers of claimants at once. That scale often means lower per-claimant payouts. Funds must be divided among all participants, and attorneys’ fees, administrative costs, and settlement terms dilute each provider’s share. The result: a check that may be somewhat easy to claim, but underwhelming in value.
Individual litigation involving opting out, by contrast, allows providers to seek revenue recovery based on the full scope of damages relevant to their organization. If your practice has endured years of underpayments, been forced out-of-network, or faced systemic delays and denials, you may have high-value claims that far exceed what a class settlement would yield.
In many cases, that gap can amount to millions in additional revenue.
For smaller or mid-sized practices, that level of revenue recovery could transform operations. For larger health systems, it could offset years of reduced margins and fund future growth. As reimbursement pressures mount across the industry, the financial opportunity presented by individualized litigation becomes increasingly hard to ignore.
Although a class action can result in revenue recovery, it is equally important to focus on the rights which might be lost. Participating in a class action means accepting the settlement’s release language, which can be broader than it appears. In some cases, these releases extend beyond the specific injury at issue, potentially waiving your right to pursue future litigation for related (but still distinct) payer conduct. Failure to opt out may leave your organization locked into terms that handicap future claims. In some cases, the long-term legal consequences of that release can outweigh any short-term payment from the class action.
Consideration #2: What Insurer Bad Behavior Is Your Organization Trying to Combat?
Class action settlements are designed to resolve large-scale disputes affecting a broad category of harmed individuals and groups. But in doing so, they rarely address the specific behaviors or policy decisions that triggered the issue, or the unique issues that may have affected subsets of the class. The process focuses on compensating the class, not fixing the issues affecting your group.
Key Factors That Make Your Case Unique
Class settlements often fail to reflect the unique damages your organization may have suffered. For example, the contrast in how physicians vs. health systems are treated, the terms of your direct contracts with the payer—or lack thereof, and the specific impact of insurer practices in your geographic market can all create meaningful differences in harm that class treatment may overlook.
Health Systems Vs. Physicians & Physician Groups
In the case of the $2.8B BCBS suit, 92% of the settlement proceeds are going towards health systems due to evaluations by the plaintiff’s economists. This means that the affected practitioners and provider groups are left to share only 8%. Therefore, if a physician group is trying to combat insurer underpayments, this particular lawsuit may not be the most fruitful.
Contractual Payer Relationships (or Lack Thereof)
Organizations with direct contracts in place may have specific rights or limitations based on the terms of those agreements. In contrast, non-participating or out-of-network providers are often left without a clear legal framework for reimbursement. A class settlement rarely captures these nuances, potentially overlooking key differences in payment terms, rate methodology, and enforcement mechanisms.
Geographical Market Impact
Insurer tactics aren’t always applied uniformly across markets. Your region may be subject to unique practices, such as aggressive downcoding, network tiering, or payment deferrals that aren’t as prevalent elsewhere. Class settlements based on national averages or aggregated harm can fail to account for the concentrated damage in specific geographic areas.
Why a Targeted Litigation Strategy?
If your organization has been affected by targeted practices, such as delays in pre-authorization, manipulation of payment rates, or algorithmic claim denials, individual litigation gives you the ability to focus on those exact practices and your precise harms. You can craft a case around how those behaviors impacted your business, present specific evidence, and negotiate toward remedies that make sense for your unique situation and goals.
This type of tailored litigation also allows for different forms of resolution. Rather than accept the same terms as every other claimant, you can pursue corrective action, policy changes, or operational commitments that align better with your goals.
Consideration #3: Could Individual Litigation Yield Greater Leverage or Long-Term Value?
Class settlements may resolve overall disputes, but as is often the case, influencing payer behavior is always a challenge.
Despite billion-dollar settlements, many insurers continue to engage in the same patterns of underpayment, denials, and obfuscation that triggered the original lawsuits. Consider UnitedHealthcare:
Situation #1: Use of AI
- In 2023, UHC was sued for using an AI algorithm (NaviHealth) to deny post-acute care for Medicare Advantage patients.
- By 2024, ProPublica reported that similar AI denial tools were still being used by UHC—despite multiple states declaring them illegal.
Situation #2: Out-Of-Network Underpayments
- In 2010, UnitedHealthcare and its subsidiary Ingenix agreed to a $350 million class action settlement to compensate New York providers for underpayments on out-of-network services. Despite this penalty, similar patterns of reimbursement manipulation continue.
Similarly, big insurer Centene faced multiple class actions across a span of 10 years related to fraud and ghost networks — the first being in 2018 and then again in 2024.
The lesson: even large penalties may not deter long-standing payer tactics. Some providers are recognizing that individual claims, when coordinated and focused, can apply pressure in different ways.
By bringing multiple cases that target different aspects of a payer’s behavior, providers can chip away at the defenses class actions can’t reach. Coordinated litigation strategies, such as Allia Group’s bundled model, allow providers to file separate but aligned lawsuits that target key vulnerabilities, expose misconduct, and escalate pressure over time. In fact, payers may be more reasonable in resolving smaller individual cases.
Moreover, new perspectives matter. Class action attorneys often spend years (even decades) building a case. As settlement discussions begin, fatigue and compromise can set in. In some cases, lawyers may prioritize resolution over impact, trading strong positions for speed. Fresh litigation teams can approach the dispute with renewed energy, new angles, and different objectives, unlocking terms and evidence that might otherwise remain buried.
Litigation can also be valuable through discovery. Some payers settle quickly to avoid depositions, document production, or expert testimony. If your group is seeking transparency or insight into payer behavior, individual litigation may offer a path to information that can influence broader strategy.
The Bottom Line: Align Your Legal Strategy With Organizational Priorities
Class actions aren’t inherently bad, but they aren’t inherently right for every provider, either.
For organizations with limited damages, minimal disruption, or a desire to avoid litigation, participating in a class may make perfect sense. On the other hand, opting out might make more sense for providers who’ve been significantly harmed by payer conduct and want more control over the outcome.
Though this move may seem risky at first, individual litigation no longer has to mean high risk and high cost. Structured models like Allia Group’s make it easier for providers to take strategic legal action without overextending internal resources. By bundling similar claims, funding the legal process, and drawing on payer-specific expertise, Allia Group helps providers unlock the full value of their claims and play a more active role in shaping the industry’s future.
If your organization is weighing whether to join or opt out of a class action, we can help you evaluate the potential upside of individual litigation. Contact us today to learn how our bundled litigation model works.
*The information contained in this blog is provided for informational purposes only, and should not be construed as legal advice on any subject matter.
