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BCBSM Seeks To Dismiss Antitrust Lawsuit

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Blue Cross Blue Shield of Michigan filed a motion Friday, in U.S. District Court in Detroit seeking dismissal of the antitrust lawsuit brought by the U.S. Department of Justice and the Michigan Attorney General in October.       

The government’s lawsuit seeks to eliminate provisions in contracts between BCBSM and some Michigan hospitals that guarantee the lowest prices for more than 4 million BCBSM members.  These provisions are known as “most favored nation” clauses, and are commonly used in a number of industries.  These types of provisions have never been invalidated by antitrust litigation.

“The government’s lawsuit is deficient and should be dismissed as a matter of law,” said Jeffrey Rumley, BCBSM vice president and chief legal counsel.  “It fails to recognize that the Michigan Blue Cross plan was enabled by state law and recognized by our Legislature as a primary vehicle to achieve critical public policy goals of the state – namely statewide access to health care at reasonable cost for all of Michigan’s citizens.  U.S. Supreme Court precedent has long protected such state-related entities from federal antitrust claims, and that should continue to be the case here.

In filing the motion to dismiss the suit, BCBSM  made two primary arguments:

For nearly 70 years, entities like BCBSM that are enabled by state law and strongly and comprehensively regulated by state government have been protected against federal antitrust lawsuits by U.S. Supreme Court precedent.

The government failed to meet the standard for filing an antitrust lawsuit – alleging specific facts that demonstrate economic harm caused by anticompetitive behaviors in specific geographic markets or within specific products.  No such facts were cited in the government’s pleading.

“This litigation makes no sense.  The U.S. government is attacking the very model for a post-reform health insurance company,” Rumley said.  “Guarantee coverage to all, provide universal access to hospitals, comply with strong regulations, manage down the cost of health care and maintain very little profit margin – these are all goals laid out for health insurance companies under health care reform.  This is our business model.  We employ these values every day here at Blue Cross Blue Shield of Michigan.”

BCBSM is uniquely and comprehensively regulated by state government under Michigan Public Act 350 of 1980 – BCBSM’s enabling legislation.

Blue Cross Blue Shield of Michigan is a nonprofit corporation and an independent licensee of the Blue Cross and Blue Shield Association.

            (The Associated Press contributed to this story.  Copyright 2010. All Rights Reserved.)

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