Michigan Insurance Commissioner Kevin Clinton has issued an order that the state will prohibit payors' preferential hospital pricing policies unless they meet his approval, according to a Detroit Free Press report.
The decision will go into effect February 1, applying to all health insurers in the state.
Preferential pricing, or most favored nation clauses, traditionally require a provider to give the payor the floor rate that it gives to any other comparable payor.
In the 2010 suit filed by the Department of Justice against Blue Cross Blue Shield of Michigan, the government said MFN clauses prompt hospitals to charge other payors more to offset the discounts given to the Blues. Aetna has sued the payor with similar allegations. Both cases are still pending in court.
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The decision will go into effect February 1, applying to all health insurers in the state.
Preferential pricing, or most favored nation clauses, traditionally require a provider to give the payor the floor rate that it gives to any other comparable payor.
In the 2010 suit filed by the Department of Justice against Blue Cross Blue Shield of Michigan, the government said MFN clauses prompt hospitals to charge other payors more to offset the discounts given to the Blues. Aetna has sued the payor with similar allegations. Both cases are still pending in court.
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