Blues plan, hospitals settle $26M antitrust claims

Blue Cross Blue Shield of Montana's plans to take over an even larger portion of the state health insurance market has been squashed by the Department of Justice (DoJ) and the attorney general's office because of antitrust concerns.

In August, Blue Cross struck a deal with the six major hospitals that own the insurer Health West Health Services in which Blue Cross would pay them $26 million to buy their employees' health insurance from Blue Cross instead of New West, reports the Associated Press.

However, U.S. and state justice officials investigated the New West-Blue Cross deal, concerned it would essentially create a monopoly and lead to higher premiums, the Billings Gazette notes. The DoJ and attorney general filed a proposed settlement in federal court to resolve their competitive concerns. Under the settlement, the hospitals can purchase health plans for 11,000 of their employees through Blue Cross, but New West must sell its remaining 14,600 policies to a separate insurance company, according to KRTV.

"We are committed to preserving competition in the health insurance industry because competition spurs insurers to lower prices, enhance services and increase quality," said Sharis Pozen, acting assistant attorney general in charge of the DoJ's Antitrust Division.    
The proposed settlement also would prevent Blue Cross from interfering with the acquirer's ability to compete effectively, requiring Blue Cross to notify the regulators before it uses exclusive contracts with health insurance brokers or most-favored-nation provisions in its agreements with healthcare providers.

PacificSource of Oregon has begun negotiations with New West to purchase the remaining policies. It already signed a letter of intent to buy some of the policies, but the purchase plan must be reviewed by the Minnesota state auditor, notes the Gazette.

To learn more:
- read the DoJ statement
- read the Associated Press article
- check out the KRTV article
- see the Billings Gazette article