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Blue Cross Blue Shield insurers reach tentative antitrust settlement for $2.7 bln
The Blue Cross Blue Shield insurance group has reached a tentative settlement in an antitrust lawsuit filed on behalf of customers that would require a payout of about $2.7 billion, the Wall Street Journal reported on Thursday. Plan subscribers and healthcare providers allege that the Blue Cross and Blue Shield member plans have agreed not to compete with one another, which violates the Sherman Act and other state antitrust laws. The lawsuits were first filed about eight years ago. The settlement has yet to receive approval from U.S. District Judge R. David Proctor in Birmingham, Alabama, who is presiding over the case, the Journal said. Under the tentative settlement, the Blue insurers would drop a rule that limits the share of each company’s total national revenue that can come from business that isn’t under Blue brands. That change could increase competition among the companies if they choose to expand their non-Blue lines of business in one another’s geographies, experts said. The tentative settlement would also loosen a rule that had limited the Blue insurers’ ability to compete with one another for the business of large national employers.
Even if a settlement is finalized, Blue Cross Blue Shield health insurers still face a parallel antitrust suit filed on behalf of healthcare providers, which alleges that the insurers illegally pushed down the payments they receive for medical services, the Journal report said. "We are proceeding with litigation," said Joe Whatley, a lead attorney for healthcare providers. Under the tentative settlement, the Blue insurers will also drop a rule that limits the share of each company's total national revenue that can come from a business that is not under Blue brands, the report said. A spokeswoman for the Blue Cross Blue Shield Association told Reuters that the organization cannot comment on the ongoing litigation. The insurers sought to take an immediate appeal of that ruling ahead of additional trial-court proceedings, but the 11th U.S. Circuit Court of Appeals rebuffed the request later that year, which gave plaintiffs significant leverage—and increased the incentive for the Blue insurers to seek a settlement. Under the draft settlement, the Blue insurers would drop a rule requiring two-thirds of each company’s national net revenue from health plans and related services to come from Blue-branded business. That little-known rule, which limits the companies’ ability to expand, emerged as a potential impediment to Anthem’s $48 billion deal to buy Cigna Corp. , which ended up foundering largely over its own antitrust issues.
https://www.wsj.com/articles/blue-health-insurers-reach-tentative-antitrust-settlement-for-2-7-billion-11600967231
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