Justice Dept. Goes After Blue Cross Blue Shield Of Michigan

Crimefighters at the Justice Department put on their antitrust capes today, filing a lawsuit against Blue Cross Blue Shield of Michigan. The DOJ alleges the insurance company violated antitrust laws by asking hospitals to sign contracts that precluded other insurers from offering a better discount.

From Reuters:

There are two types of clauses criticized by the antitrust division. One requires the hospitals to charge other commercial insurers more than Blue Cross is charged, while another type bars the hospitals from giving Blue Cross’ rivals a deeper discount than Blue Cross receives, according to court papers.

The DOJ says that such clauses cause “substantial harm to the marketplace,” and effectively let the insurance company determine the level at which its rivals can set prices.

A rep for BCBS tells Reuters something very different — that the lawsuit will just lead to higher health care prices for the people of Michigan:

This lawsuit is without merit, and we will vigorously defend our ability to negotiate the deepest possible discounts for our members and customers with Michigan hospitals.

U.S. Justice Dept sues Michigan Blue Cross [Reuters]

Want more consumer news? Visit our parent organization, Consumer Reports, for the latest on scams, recalls, and other consumer issues.