A federal judge in Alabama has given the green light for an antitrust case against Blue Cross Blue Shield. The lawsuit was filed in 2013 by providers (hospitals, doctors and other health care centers) and subscribers (policyholders). It alleges that the national insurance heavyweight violated antitrust laws when it divided its service areas. U.S. District Judge David Proctor ruled that there is evidence that may support the plaintiffs’ claims, allowing the case to move forward so that the court can further evaluate the issue. The case was divided into two tracts, one for providers and one for subscribers. Beasley Allen lawyers W. Daniel “Dee” Miles, III, who is head of the firm’s Consumer Fraud Section; Archie Grubb, Leslie Pescia and Chris Baldwin were chosen to develop the provider side of the case for trial. This historic and favorable ruling by Judge Proctor concerns how it will be tried.
“The monumental antitrust ruling by Judge Proctor is one of the most positive steps forward we have witnessed in market misconduct cases in decades,” Miles said. “This ruling will undoubtedly bring long needed fairness to health insurance markets in this country.”
The case involves 36 Blue Cross plans and at the heart of the case is whether an agreement among the different plans to provide service based on geography is legal. The Plans agree to provide health insurance coverage to subscribers within a certain geographic location and agree not to compete. Some of the plans have large overlapping coverage areas, including California, Idaho, New York, Pennsylvania, Washington and Oregon.
Providers claim that Blue Cross is using its size and market power to drive out the competition and keep doctor and other medical organizations reimbursements low. Subscribers claim the arrangement could drive up premiums.
More than 100 million people nationwide are covered by Blue Cross Blue Shields plans, AL.com reports. One of the key plans involved in the suit is Blue Cross Blue Shield of Alabama, which holds the largest market share of any state in the country and an analysis by the American Medical Association shows the state is the least competitive when it comes to health insurance.
It is the largest antitrust case in U.S. history and could go to trial next summer. Judge Proctor must first decide if the case can proceed as a class action.