Justice Dept. expands probe of Blues' contracting
INDUSTRY NEWS TAGS: AMA
The Dept. of Justice has asked BlueCross BlueShield-affiliated plans in at least six states and the District of Columbia for information about their contracting practices, specifically their use of "most-favored-nation" clauses. The probe comes a few months after the agency sued Michigan’s Blues plan over its use of most-favored-nation clauses in its hospital contracts.
A most-favored-nation clause requires a physician or hospital to give the contracting insurer the deepest available discount on care — in other words, barring the doctor or hospital from granting another health plan better rates. A Justice Dept. spokeswoman confirmed that the department’s Antitrust Division is "investigating the possibility of anticompetitive behavior in various parts of the country," as related to most-favored-nation clauses.
The Justice Dept. and the Michigan attorney general sued Blue Cross Blue Shield of Michigan in October 2010 over its use of most-favored-nation clauses. In that case, the insurer was suspected of making deals with hospitals to pay more for care as long as other insurers were required to raise their rates as well. In some cases, the Justice Dept. alleged, the Blues required hospitals to charge as much as 39% more to other insurers. The Michigan Blues denied any wrongdoing and defended its contracting practices.
The American Medical Association opposes most-favored-nation clauses and has worked to help pass legislation banning them. At least three states — Indiana, Colorado and Maryland — have made them illegal.