Blue Cross anti-trust probe expands: Do some hospitals get sweetheart deals?

The U.S. Justice Department is widening an investigation into alleged collusion and price-fixing between Blue Cross Blue Shield health plans and hospitals in several states, the Wall Street Journal reports. 

The investigation is focusing on whether certain Blues plans have struck "most-favored nations" deals with hospitals that would allow the increase of premiums while potentially locking out competition. Blues plans in six states and the District of Columbia have received civil subpoenas. 

"The antitrust division is investigating the possibility of anticompetitive practices ... in various parts of the country," said a Justice Department spokeswoman. 

Officials with CareFirst Blue Cross Blue Shield, which operates in Washington, D.C., Virginia and Maryland, has confirmed it has been subpoenaed by the Justice Department, as has Indianapolis-based WellPoint, Inc., the nation's largest insurer and operator of Blues plans in Ohio and Missouri. 

Last October, the Justice Department filed suit against Blue Cross Blue Shield of Michigan, claiming it had entered into deals with about half of the state's acute care hospitals, essentially giving it favorable terms while requiring it charge other health plans up to 40 percent more for charging for the same services. 

In February, it sued United Regional Health Care System in Wichita Falls, Texas, claiming it used most-favored nation contracts to maintain rates 70 percent higher than other hospitals. The system settled the suit immediately, agreeing to drop the use of such contracts. 

For more information:
- read the Wall Street Journal article 
- read the Connecticut Mirror's article on anti-MFN legislation 

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