BOZEMAN, Mont. (AP) — Five Montana hospitals are settling a lawsuit that claimed they made a deal with an insurer to inflate employee health coverage prices in return for $26 million.

The hospitals, which deny wrongdoing, agreed to pay $6.9 million to employees to resolve the case, The Bozeman Daily Chronicle reported Saturday.

A U.S. District Court judge in Great Falls preliminarily approved the settlement Oct. 17, and notices were sent last week to thousands of hospital employees who could be entitled to the money.

The complaint says the hospitals agreed in 2012 to exclusively buy employee health insurance plans from Blue Cross Blue Shield of Montana for six years in exchange for about $26 million and two seats on the insurer's board of directors.

The hospitals involved include Bozeman Health Deaconess Hospital, Billings Clinic, St. Peter's Health in Helena, Community Medical Center in Missoula and Northern Montana Hospital in Havre.

In individual statements Friday, hospitals said they took the money to benefit their employees and that the settlement avoids an expensive lawsuit.

Bozeman Health officials disagreed that the hospital should have invested the money from Blue Cross in its employees immediately, saying it used the funds as a reserve for its health plans to keep employees' premiums low.

"Bozeman Health continues to prioritize the health, safety, and wellness of all Bozeman Health employees and patients, and we're pleased to have settled this matter," the statement said.

John Doran with Blue Cross Blue Shield of Montana said the insurer can't comment on the case because it's not a defendant.

The complaint was filed in 2017 on behalf of eight hospital workers who claimed the hospitals "attempted to — and did — profit at the expense of the plans and the participants."

A hearing on the final approval of the settlement is scheduled for Dec. 11. If approved, the hospitals will be protected from any further litigation related to the claims.
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Information from: Bozeman Daily Chronicle, http://www.bozemandailychronicle.com