RALEIGH, N.C. (AP) — Blue Cross and Blue Shield of North Carolina and the national Blue Cross and Blue Shield Association have asked a federal court to reject a lawsuit claiming the Blues’ approach to dividing up the U.S. market limits competition.
Lawyers at a firm led by David Boies, a high-profile attorney, are seeking court permission to bring a class-action lawsuit on behalf of the 3.6 million Blue Cross and Blue Shield enrollees in North Carolina, or on behalf of customers of all other Blue Cross plans.
The plaintiffs, who filed their suit in February, are attacking an agreement among the 37 Blue Cross and Blue Shield Association members that divides the country into exclusive territories. That practice helps local Blues plans accumulate market dominance in their home territories, which they then use to demand discount deals with hospitals, the plaintiffs say.
The Blues’ hospital discount deals end up inflating hospital costs for patients who have no insurance, or who have other types of health coverage, the plaintiffs say.
North Carolina Blue, Durham, N.C., and the Blue Cross and Blue Shield Association, Chicago, deny in court documents filed late Monday that their business practices violate federal anti-trust laws.
“If the court says this practice is illegal, it could open up competition to any Blue Cross plan that wants to compete in that part of the country,” said Prof. Roger Feldman, a University of Minnesota professor who studies the health insurance market.
The U.S. Justice Department filed a lawsuit based on similar arguments against Blue Cross and Blue Shield of Michigan, Detroit, in 2010, and it is investigating the pricing power of North Carolina Blue and other states’ Blues plans.
The North Carolina case plaintiffs are seeking triple damages for the amount North Carolina premiums were inflated.