Tuesday, October 19, 2010

Insurance Company Sued By Government For Anti-Competative Business Practices

I saw this article in USA Today by David Ashenfelter and Todd Spangler and thought it was interesting - Michigan and the United States are suing Blue Cross Blue shield of Michigan for anti-competitive practices.
The Justice Department filed an antitrust suit Monday against Blue Cross Blue Shield of Michigan, accusing the giant health insurer of using its market clout to stifle competition and cause consumers covered by other health plans to pay more for hospital care.

The lawsuit, filed in U.S. District Court in Detroit and joined by the state of Michigan, said Blue Cross contracts with at least 70 of the acute care hospitals in the state force them to raise prices and prevent other insurers from competing with them.

Antitrust officials say the provisions likely resulted in Michigan consumers paying higher prices.

The provisions being challenged are known as "most-favored nation" clauses or MFN. In the health care realm, they generally refer to contractual clauses between health insurance plans and health care providers that — according to the Justice Department — "essentially guarantee that no other plan can obtain a better rate than the plan wielding the MFN."
The article also points out that Blue Cross also had clauses with numerous larger hospitals that offered increased payments to those facilities, provided that all other insurers paid more, putting other insurers at a competitive disadvantage.

Just think - it is companies like these that the Republicans trust will do what is in the best interest of the nation to supply us with cheaper health care...

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