The 6th U.S. Circuit Court of Appeals in Cincinnati issued a ruling that keeps alive a Justice Department and state of Michigan antitrust lawsuit filed against Blue Cross and Blue Shield of Michigan over the not-for-profit insurer's price-negotiating tactics with hospitals.
Blue Cross and Blue Shield of Michigan, the state's largest insurer, argued that the government lawsuit should have been dismissed for lack of jurisdiction by a district court in Detroit last year because the Blues are a state-created entity, and therefore entitled to immunity from antitrust scrutiny under the “state-action” doctrine.
U.S. District Court Judge Denise Page Hood rejected that argument and several others in an August 2011 order denying Blue Cross Blue Shield's motion to dismiss the case.
The insurer appealed Hood's ruling, arguing that decisions to dismiss based on the state-action doctrine could fall into a narrow type of appeal that can be heard before a circuit court without a final judgment in a case. On Feb. 23, however, a panel of three judges for the 6th Circuit ruled (PDF) that the Blue Cross case did not qualify, and therefore the court could not consider the appeal without a “final decision.”
Blue Cross spokeswoman Helen Stojic said the decision to reject the appeal—called an interlocutory appeal—was based on procedural grounds, not on the legal merits of the insurer's argument. “Interlocutory appeals are not often granted, but we thought it would be appropriate to ask the court anyway,” Stojic said.
Discovery in the lawsuit is ongoing, and a trial is set for April 2013.
The state and federal governments allege that the insurer has used “most favored nation” pricing contracts that drive up medical prices for consumers in every other health plan. The insurer rejects the allegation, saying its contracts guarantee its members the best possible rates, fulfilling its state-mandated mission.