A federal lawsuit filed by Mount Nittany Health on Thursday claims the Blue Cross Blue Shield Association and affiliated insurers have long colluded to restrict competition and underpay health care providers in violation of antitrust laws.
The State College-based health system’s 148-page lawsuit filed in the U.S. Middle District Court of Pennsylvania joins dozens of others nationwide by providers who recently opted out of a $2.8 billion national class-action settlement from a case in Alabama over similar claims. Blue Cross Blue Shield admitted no wrongdoing as part of that settlement, which is expected to be finalized in July and which health systems had until to opt out of.
In addition to the association, insurers Highmark, Capital and Independence are named as defendant, and numerous other Blue Cross Blue Shield licensees are named as co-conspirators.
Through the association, the lawsuit alleges, Blue Cross Blue Shield insurers allocate exclusive geographic areas for markets and customers and use anticompetitive agreements to fix prices.
“As a result, healthcare providers… were paid much less than they would have been paid in a competitive market,” attorneys for Mount Nittany Health wrote.
The agreements to not enroll customers or negotiate prices outside their designated geographic areas means that some of the nation’s largest insurers have not expanded their markets as they otherwise would have, the lawsuit claims.
If those companies, which are independent businesses tied by their Blue Cross association, did develop and operate provider networks in new areas, “it would provide increased competition, and such competition would result in higher payments to providers,” Mount Nittany Health attorneys wrote.
“The Blues,” which provide coverage to about 100 million Americans, also leverage their collective size and name recognition “to fix prices below the competitive level,” giving providers little-to-no negotiating power and the prospect of losing all Blue Cross Blue Shields patients if they opted to leave their local Blue’s network.
“Anticompetitive practices and market power permit Defendant and Co-Conspirator Insurance Companies to pay in-network providers less than they would have paid absent these violations of the antitrust laws,” according to the lawsuit.
Mount Nittany Health is seeking triple the amount of unspecified damages it has sustained, along with interest, attorneys fees and injunctive relief barring the Blues from continuing to conduct practices Mount Nittany says are in violation of antitrust laws.
Eight Philadelphia nonprofit health systems also filed a similar antitrust lawsuit against the association and affiliated insurers earlier this month.
