Pennsylvania Blues face trade practices investigation

The Pennsylvania Insurance Department has announced that it's turning a beady eye on the state's four Blue Cross & Blue Shield Insurance companies, investigating whether the quartet have engaged in "anticompetitive or unfair trade practices." The Insurance Department will begin to investigate the operations of Blue Cross of Northeastern Pennsylvania, Capital BlueCross, Highmark Inc. and Independence Blue Cross this month, and expects to wrap up its work by early 2010.

The investigation follows a painfully long, drawn-out process in which Highmark and Independence planned a merger, begged for permission, then decided to withdraw their request when it became clear that the state wasn't going to play. The state's look at the planned merger seems to have contributed something to its bad feelings about the state of health plan coopetition in Pennsylvania overall.

The investigation will focus on territorial restrictions, agreements among Blue plans that could impede competition, and whether the Blues are using their 60 percent share of the state's private health insurance market for an unfair advantage.

The health plans, of course, aren't happy about the Department of Insurance's plans. But the decision to launch an investigation was cheered by the Pennsylvania Medical Society, which has been raising concerns about the Blues' market power for years.

To learn more about the investigation:
- read this Philadelphia Inquirer piece

Related Article:
Highmark stabilizing despite loss of Independence deal