The Department of Justice, state of Michigan and Blue Cross Blue Shield of Michigan filed a joint motion today with the U.S. District Court in Detroit to dismiss an antitrust lawsuit filed against the payor regarding its use of "most favored nation" clauses in certain contracts with hospitals, according to a BCBSM news release.
The DOJ and Michigan are seeking the suit's dismissal in light of state legislation that bans the use of most favored nation clauses by health insurers, which goes into effect in January 2014 and the Michigan insurance commissioner recently ordered MFNs "unenforceable" in any health insurer's contracts as of February 2013.
The suit had alleged that BCBSM's most favored nation clauses required certain hospitals to charge higher prices to competing health insurers — prices upwards of 20 percent more.
"The recent signing of legislation by our Governor which prospectively prohibits all carriers from using MFNs, as well as a prior order of the insurance commissioner prohibiting any insurer's use of MFNs absent prior approval, confirms this authority and renders moot any further need for the Justice Department and the state to pursue the case. Blue Cross is pleased that the Justice Department and the state join with us today in bringing this matter to a close," Jeffrey Rumley, BCBSM vice president and general counsel, said in the release.
Michigan Enforcing Ban on Most-Favored-Nation Contracts
Michigan Restarts Bill to Change Blue Cross to Non-Profit Mutual Fund
The DOJ and Michigan are seeking the suit's dismissal in light of state legislation that bans the use of most favored nation clauses by health insurers, which goes into effect in January 2014 and the Michigan insurance commissioner recently ordered MFNs "unenforceable" in any health insurer's contracts as of February 2013.
The suit had alleged that BCBSM's most favored nation clauses required certain hospitals to charge higher prices to competing health insurers — prices upwards of 20 percent more.
"The recent signing of legislation by our Governor which prospectively prohibits all carriers from using MFNs, as well as a prior order of the insurance commissioner prohibiting any insurer's use of MFNs absent prior approval, confirms this authority and renders moot any further need for the Justice Department and the state to pursue the case. Blue Cross is pleased that the Justice Department and the state join with us today in bringing this matter to a close," Jeffrey Rumley, BCBSM vice president and general counsel, said in the release.
More Articles on Blue Cross Blue Shield of Michigan:
Michigan Blue Cross to Become Taxable Non-Profit EntityMichigan Enforcing Ban on Most-Favored-Nation Contracts
Michigan Restarts Bill to Change Blue Cross to Non-Profit Mutual Fund