NC Consumers and Businesses Sue BCBSNC, Allege Anticompetitive Behavior in State Insurance Markets

Groups of individuals and businesses that hold health insurance policies with Blue Cross and Blue Shield of North Carolina have filed a class action lawsuit in federal court against both BCBSNC and the Blue Cross Blue Shield Association. The complaint highlights BCBSNC’s dominance in state health insurance markets and alleges violations of federal antitrust laws and unlawful restraint of trade under state law.

The plaintiffs specifically target BCBSNC’s use of Most Favored Nations clauses (MFNs) in its contracts with physicians and facilities as a way to artificially inflate premiums. (The use of MFNs has increased across North Carolina; the clauses function to guarantee that the most-favored health plan will always receive the best pricing for health care services.) The complaint alleges:

BCBS-NC has used its market and monopoly power in North Carolina to engage in a number of anticompetitive practices. For example, BCBS-NC has required key health care providers to agree to [MFNs] in their contracts with BCBS-NC….The MFNs restrict competition by preventing competitors from negotiating for lower costs and thus raising the prices that other health insurers must pay….

The Medical Society will continue to watch this case closely and provide updates as it progresses.  We anticipate that the case will generate increased interest in Senate Bill 517, which would ban the use of MFNs by North Carolina health plans. BCBSNC has emerged as the sole organization opposing its passage. The bill remains eligible for consideration during the General Assembly’s Short Session, which begins in May.

Review the Complaint Here.

 
 

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