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Michigan Blues would pay $30M to resolve 'most favored nation' lawsuit

September 9, 2014 | By
Tools

Blue Cross Blue Shield of Michigan is willing to fork out $29.9 million to resolve a consolidated lawsuit that claims the insurer used "most favored nation" clauses in its provider contracts, reported Crain's Detroit Business.

Although the U.S. Department of Justice and the Michigan attorney general in 2013 dropped their lawsuit, which claimed that Blue Cross illegally used most-favored nation clauses in its provider contracts to ensure it received lower rates than other insurers, several related civil lawsuits moved forward against the insurer.

Now Blue Cross wants to settle those civil cases, which were consolidated into one lawsuit. One case filed by Aetna claimed that Blue Cross's most favored nation clauses forced hospitals to charge Aetna as much as 39 percent more than the Blue Cross rate, FierceHealthPayer previously reported.

Under the settlement, Blue Cross admits no wrongdoing and will distribute most of the $30 million funds among competitor insurers, self-insured companies and its members. As many as 7 million businesses and Blue Cross members could be eligible for the settlement funds if they paid for hospital services between January 2006 and June of this year.

"This settlement, the parties agree, is an amicable resolution reached before the court or the jury had decided the merits of either party's legal position," Blue Cross said in a statement, according to CDB.

A U.S. District Judge preliminarily approved the settlement during the summer, but she still must review it for fairness before she can issue final approval, which is expected in November.

To learn more:
- read the Crain's Detroit Business article

Related Articles:
Most-favored nation clauses could be illegal in North Carolina
Feds, state drop antitrust suit against Michigan Blues
Blues plans allegedly conspire to avoid competition
Blues must stop using 'most-favored nation' clauses
Court: Most-favored nation contracts don't harm competition
Aetna sues Michigan Blues for artificially raising market rates

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