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Federal Anti-trust Lawsuits Filed Against Blue Cross Blue Shield

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Dozens of anti-trust lawsuits nationwide filed against Blue Cross Blue Shield, including one filed in Texas, have been consolidated before the U.S. District Court for the Northern District of Alabama. Houston-based attorney Debra Brewer Hayes, who represents Texas plaintiffs, has been appointed to the court’s Multi-District Litigation Plaintiff’s Steering Committee.

The plaintiffs have requested numerous forms of relief, to include actual damages with interest, trebled in accordance with federal law, and an injunction preventing the health care behemoth “from entering into, or from honoring or enforcing, any agreements” that foster “illegal” and “anti-competitive” practices.

The lawsuits assert the illegality of licensing agreements between the Blue Cross Blue Shield Association and its 38 “Blue plans” across the country that cover about 100 million enrollees, roughly one out of three Americans.

The plaintiffs claim that those 38 individual health insurance plans, “which operate under the Blue Cross and Blue Shield trademarks and trade names,” reads the complaint, would operate competitively but for agreements with the Blue Cross Blue Shield Association.

Blue plans agree not to compete with one another in those pacts. Moreover, those contracts, plaintiffs argue, allow Blue Cross Blue Shield Association to divide and to allocate health insurance markets among the plans and to impede competition, thus limiting consumer health care choice and setting the stage for “skyrocketing premiums” as well as egregious financial injury to the plaintiffs.

Houston-based law firm Reich & Binstock represents Texas plaintiff Chiropractic Plus P.C. and all others in their affected class. Chiropractic Plus is an in-network health care provider who treats patients insured by Blue Cross Blue Shield of Texas.

Hayes, who is of counsel to Reich & Binstock, on April 23 became one of four attorneys court-appointed to serve on the Multi-District Litigation Plaintiff’s Steering Committee.

Texas plaintiffs challenge the way Blue Cross Blue Shield Association does business, and the plaintiffs cite in their complaint the following anti-trust infringements:

  • Illegally restraining trade nationally through the execution of contracts established by the Blue Cross Blue Shield Association “that allocate the geographic markets for health insurance by limiting each Blue’s activity outside of a designated service area, thereby preventing competition among BCBS companies.”
  • Prohibiting in-network health care providers from referring patients insured by a Blue plan to the plaintiffs’ out-of-network facilities for treatment — in effect, coercing the plaintiffs either to become contracted members or to relinquish potential market share and revenues.
  • Suppressing competition by “increasing prices for individual and small group health insurance sold in their respective territories and by decreasing the rates paid to healthcare providers.”
  • Terminating or threatening to terminate network physicians who dare violate territory restrictions to compete with other Blue licensees.
  • Restraining a non-member plan from buying a controlling interest in a Blue plan, curtailing competition from coming, in a sense, out of the Blue.

The bottom line for the plaintiffs is that their businesses would be more competitive and their revenue potential would be greater were it not for the defendant’s anti-competitive practices.