Former Executive Accuses Blue Cross Blue Shield of Whistleblower Retaliation

A former chief marketing officer for Blue Cross Blue Shield of Montana (“BCBSMT”) filed a law suit in the U.S. District Court for Montana’s Lewis and Clark County, alleging that she was terminated in retaliation for reporting illegal actions by the company, the Independent Record reported on April 8.  The lawsuit alleges that Shannon Marsden raised concerns that the insurance giant had made unapproved sales commissions rebates to customers.  The Record explained that “Unapproved rebates of insurance commissions to customers can lead to discriminatory pricing of premiums and make it more difficult for regulators to determine that an insurance provider is solvent enough to cover its potential liabilities. The practice is illegal in most states, including Montana.”

As the chief marketing officer, Marsden was one of the highest-paid executives at BCBSMT, earning over $250,000 per year.  She informed the company’s chief legal counsel, Mary Belcher, of her concerns about the company’s practices around the beginning of August 2011.  Despite having a contract that runs through the end of 2012, BCBSMT fired Marsden on December 30, 2011.  She alleged that the firing was in retaliation for raising concerns about misconduct at BCBSMT.

When a major medical insurance company violates financial regulations, it often also violates the False Claims Act (“FCA”), which imposes penalties on companies that defraud governmental programs.   When an employee raises concerns that a company may be defrauding the government, that employee is protected against employer retaliation by §3730(h) of the FCA.  A successful FCA retaliation plaintiff can obtain monetary damages including reinstatement, two times backpay, attorneys’ fees, and, in some courts, compensatory damages.