The U.S. Justice Department has expanded an investigation of Blue Cross/Blue Shield licensees’ alleged anti-competitive agreements with hospitals beyond Michigan, where it filed an antitrust lawsuit against the insurer.
Federal officials and some states’ attorneys general also sent civil subpoenas to Blue Cross/Blue Shield licensees in Kansas, Missouri, Ohio, North Carolina, South Carolina, West Virginia and Washington, D.C., according to several media reports.
CareFirst, which operates the Blue Cross plan in Washington, D.C., received a request for documents from the Justice Department and is reviewing it, according to Kevin Kane, manager of associate communications and media relations for the Owings Mills, Md.-based company. CareFirst, Maryland’s largest health insurer, has about 3.4 million members in Maryland, Northern Virginia and Washington, D.C.
The probe of the Blue Cross and Blue Shield licensees coincides with the increased federal focus being cast on the health insurance system. In the last two years, President Barack Obama and other legislators have often cast health insurers as opponents to the government’s health reform efforts, more interested in their profits than increasing coverage and lowering costs.
Beginning in Michigan
In October 2010, the Justice Department and Michigan’s attorney general sued Blue Cross Blue Shield of Michigan, alleging the company, that state’s largest health insurer, violated antitrust laws and secured a large competitive advantage by forcing hospitals to charge higher prices to Blue Cross’s rivals.
In the Michigan case, officials allege that Blue Cross and Blue Shield force 22 of the state’s 131 hospitals to sign contracts that stifled competition, resulting in higher health insurance premiums for consumers and employers. Blue Cross Blue Shield of Michigan denies the charges.
Blue Cross Blue Shield of Michigan has asked a judge in U.S. District Court in Detroit to dismiss the case. A hearing on the request is scheduled for April 19.
Looking to lower costs
“All of us in Blue Cross/Blue Shield companies work hard everyday to keep costs down for our members,” Brett Lieberman, a spokesman for the Blue Cross Blue Shield Association, told IFA. The association licenses the 39 health insurers so they may use the Blue Cross, Blue Shield or both marks.
“Our efforts have generated hundred of millions of dollars in savings for our members,” Lieberman said. “Many industries and companies routinely use most favored-nation clauses because it guarantees low prices. And particularly now, when insurance premiums are increasing because of medical costs, it hurts consumers to remove tools that help to lower costs.”
U.S. antitrust probe of Blues widens to Md., N.C., 4 other licensees via IFAwebnews .