A class action lawsuit filed against Blue Cross Blue Shield of Michigan alleges the insurer offered to pay 70 hospitals higher reimbursement rates if they agreed to charge all other payers at much higher rates.
Plaintiffs argued the contracts — called Most Favored Nation deals —caused healthcare spending to increase.
"So the hospitals get paid more money, Blue Cross gets a better deal and everyone else has to pay even more money. And so Blue Cross makes more money and healthcare expenses go up," said one of the plaintiffs' lawyer, according to a court transcript obtained by Target 8.
The complaint accused BCBS of extending these contracts to 70 hospitals in western Michigan between 2008 and 2012. Only 13 hospitals were found to have higher reimbursement rates with BCBS during that time.
BCBS agreed to a $30 million settlement to resolve allegations of it inflating healthcare prices.
BCBS denies its contracts caused prices to spike, according to the article.