Employer Sues BCBS Michigan Alleging Hidden Fees
By Mark Flores – Executive Vice President and Co-Founder at AVYM Corporation
Blue Cross Blue Shield of Michigan is under fire again—this time accused of siphoning off millions in excessive fees from self-funded employer health plans.
A new lawsuit filed on behalf of all their own self-insured clients claims the insurance giant runs a deliberately convoluted “cost-savings” program that’s anything but.
Case Info: Wesco, Inc. et al v. Blue Cross Blue Shield of Michigan; Filed: June 9, 2025, U.S. District Court for the Eastern District of Michigan; Case Number: 2:2025cv11712
Instead of delivering savings, the suit alleges, BCBS Michigan uses the program as a backdoor revenue stream—diverting plan assets and inflating charges under the guise of managing costs.
This class action comes on the heels of a recent 6th Circuit decision, where the Court found that “[plaintiff] sufficiently alleged BCBSM used an undisclosed “flip logic” to systematically overpay medical claims and later profited from its own mismanagement through a so-called “Shared Savings Program,” in which it clawed back over-payments and kept a percentage for itself.”
A Wake-Up Call for Self-Insured Employers
This case should serve as a wake-up call for all self-insured plan sponsors. It underscores the urgent need to thoroughly review and scrutinize plan documents, administrative agreements, and claims data for signs of abusive or questionable practices. Many employers remain unaware of hidden fees, vague contract language, or opaque reimbursement arrangements that can drive up costs while eroding fiduciary compliance.
At the heart of the complaint is a charge that BCBS built a system designed to enrich itself at the expense of employers who trusted the insurer to act as a responsible steward of their health plan dollars.
Without a clear line of sight into how their healthcare dollars are managed, plan sponsors are exposed to financial risk and potential legal liability.
Transparency of ERISA Plan Healthcare Spend
This case highlights a broader problem across the self-funded health system: employers are too often left in the dark about how their healthcare dollars are being spent.
That’s where firms like Avym come in. Avym partners with employer-sponsored health plans to bring transparency, accountability, and clarity to their health spend. Through deep forensic analysis of claims and contracts, Avym helps plan sponsors identify red flags, eliminate waste, and hold third-party administrators accountable—all while ensuring alignment with fiduciary duties.
“We’ve been sounding the alarm on these issues for years,” said Avym Vice President and Co-Founder, Mark Flores,
“Cases like this only confirm what we’ve seen across the industry: far too many employers are unknowingly exposed to excessive and unnecessary costs.”
As legal pressure mounts and scrutiny intensifies, this lawsuit could mark a tipping point in the growing push for true healthcare transparency—underscoring the urgent need for employers to take a hard look at their health plans before hidden problems turn into costly liabilities.
