“The antitrust division is investigating the possibility of anti-competitive practices involving most-favored nation clauses in various parts of the country,” said a Justice Department spokeswoman, who would not comment further.
The contract terms, the government said in the complaint, not only guaranteed Michigan Blues the best hospital rates but also demanded that some hospitals charge competing insurers more, by as much as 39%, resulting in higher costs in the market for insurance and healthcare services. The insurer has asked the court to dismiss the claims, and a hearing is scheduled for April 19.
“It is certainly possible that the Justice Department will try to collect information from hospitals in the markets that it's investigating,” said Richard Raskin, a healthcare antitrust attorney at Sidley Austin in Chicago. Hospitals in those markets should take note of the Justice Department's complaint in Michigan, he said.
Authorities did not name hospitals as defendants in the Michigan case, but Raskin said the complaint did allege anti-competitive markets for hospitals as well as insurers. And at least one lawsuit that followed the government's complaint has been brought against hospitals. The city of Pontiac, Mich., sued the insurer and 22 hospitals and health systems over the most-favored nation clauses (Jan. 31, p. 16).
The clauses, which can be used without violating antitrust laws, are under close scrutiny by the Justice Department. “Any time a dominant provider uses anti-competitive agreements, the market suffers,” said Christine Varney, assistant attorney general in charge of the Justice Department's antitrust division, after announcing the Michigan lawsuit. She said at the time the department intended to pursue such conduct “anywhere in the United States.” Blues insurers that received recent inquiries said the authorities' requests were being reviewed.
Jill Becher, a spokeswoman for WellPoint, said in an e-mail that the Justice Department inquiries sought information about the insurer's plans in Ohio and Missouri and that WellPoint “plans to provide information requested” concerning clauses in its contract.
“These clauses have been described as conveying most-favored nation status,” Becher said. “However, the more accurate term and practice of comparable rate protections means that we are seeking to assure that we are not being disadvantaged.”
Highmark Blue Cross and Blue Shield of West Virginia confirmed the insurer received inquiries from state and federal officials concerning its contracts. The insurer said in a written statement that courts have previously upheld use of most-favored nation clauses that have been challenged under antitrust laws.
Mary Beth Chambers, a spokeswoman for Blue Cross and Blue Shield of Kansas, said the insurer was cooperating with the inquiry and preparing a reply.
A spokesman for CareFirst Blue Cross and Blue Shield, which has enrollees in Maryland, Washington and northern Virginia, said the insurer received a request for documents, and a Blue Cross and Blue Shield of South Carolina spokeswoman said the health plan was working with attorneys to respond to an inquiry.
The Wall Street Journal, which first reported the latest inquiries, said Blue Cross and Blue Shield of North Carolina also received a request. The insurer did not respond to requests for comment.