Blue Cross and Blue Shield United of Wisconsin charged last week that its customers' bills in northern Wisconsin are exorbitant because Marshfield Clinic dominates the region's medical business.
The clinic, with which Blue Cross had a partnership until 1987, prevents the insurance company's health maintenance organization from operating in the area, the insurer argues in a U.S. District Court suit filed in Madison, Wis.
The suit represents competition for business in a region where the insurance company says Marshfield Clinic virtually controls 75% of specialist physicians in 10 counties.
The Milwaukee-based insurer says it spends millions of excess dollars paying the bills of its customers who are treated by the clinic.
Robert J. De Vita, the clinic's executive director, denied it tries to prevent price competition and contends that its fees are comparable to those of similar clinics in the Midwest.
Marshfield is Wisconsin's largest physician-owned clinic, reporting revenue of $232 million in 1992. Its HMO is Security health Plan of Wisconsin, with about 62,000 customers.
The suit says the clinic charges the highest prices in Wisconsin and that Security Health's premiums are more expensive for public employees than the average premium of similar HMOs.
Blue Cross, the clinic and St. Joseph's Hospital in Marshfield were partners until 1987 when Blue Cross pulled out, citing financial losses, Mr. De Vita said.
Security Health then took over the former partnership's patients.
Marshfield Clinic serves about 1 million people through a network of 21 offices. Besides the 400 associated physicians, it is affiliated with more than 100 independent physicians.
First lady Hillary Rodham Clinton and Wisconsin Democratic Rep. David Obey were considering a trip to visit Marshfield Clinic late last week. But at press time, an aide to Mr. Obey said the plans hadn't been completed. The aide said the lawsuit wouldn't be an issue in making a final decision.