The Blue Cross Blue Shield Antitrust MDL, currently pending in the Northern District of Alabama, is a broad-sweeping group of claims against the insurance giant that is divided into two tracks, one for subscribers and one for providers. Because of the different remedies sought and available to the two groups, they each face different challenges to their claims and are proceeding at slightly different paces.
The subscribers are facing a challenge to their claim for damages under decades-old U.S. Supreme Court precedent that bars all damages claims related to a rate that has been filed with the government. Seeking summary judgment, BCBS said that CB Roofing Inc. and American Electric Motor Service Inc. cannot collect money damages under the Sherman Act because the rates they paid to BCBS Alabama were validly filed with the state’s Department of Insurance, the agency with authority to regulate the reasonableness of those rates.
The two companies had told the Alabama federal court overseeing the MDL that they were forced to pay premiums that were too high because of BCBS’ anti-competitive conduct, and that the companies would have paid less had the other defendants sold health care coverage in Alabama.
The filed-rate doctrine itself does not depend on the level of agency review because any finding regarding appropriate levels of review would tell the agency how to do its job, and even if the rate actually charged was different from the filed rate, the doctrine still applies, the insurer argued.
Providers are currently facing summary judgment motions from a few of the wholly blue-owned companies involved in the anticompetitive agreements alleged in the complaint. National Accounts Service Company (NASCO) and Consortium Health Plans (CHP) both sought summary judgment by arguing that they are not involved in the conspiracy but are fully separate from the Blues. Lawyers for providers believe that the summary judgment will be denied. Both companies only offer their services to the Blue Cross Blue Shield entities and have goals of furthering the Blue Cross Blue Shield market dominance.
Providers and subscribers are both facing motions to dismiss for lack of personal jurisdiction and venue from several, but not all, of the Blue Cross Blue Shield entities. Those arguments, however, ignore the nature of an anticompetitive conspiracy. Antitrust and personal jurisdiction have a strange relationship in that by the nature of the agreement, some entities have agreed to not enter into the market of another entity. Under the conspiracy theory of personal jurisdiction, utilized under Alabama law, so long as one party to the conspiracy takes an action in furtherance of the conspiracy within the jurisdiction, then jurisdiction lies as to all parties to the conspiracy. On top of that, the Blue Cross Blue Shield system includes several programs that allow the Blues to operate across state lines to cater to national accounts – companies with employees living and working in more than one state. These programs mean that while the Blues do not compete with each other in other jurisdictions, they do operate in other jurisdictions.
Under the BCBS business model at the time of the consolidation, 38 separate plans operated in local areas nationwide under the company’s brand, providing health insurance to about 100 million subscribers. The lawsuits generally contend that the companies would compete against each other under normal market conditions, but that the companies instead allocated themselves regional health insurance markets in violation of the Sherman Act. Even though the case began in 2012, it is still in relatively early stages of the litigation.
Judge Proctor has indicated he will rule on the NASCO and CHP summary judgment motion on the briefs and will have oral argument on the filed-rate doctrine in November. If you need more information, contact Leslie Pescia or Rebecca Gilliland, lawyers in our Consumer Fraud & Commercial Litigation Section, at 800-898-2034 or by email at Rebecca.Gilliland@beasleyallen.com or Leslie.Pescia@beasleyallen.com.
Contact us today for a free legal consultation with an experienced attorney.
Fields marked *may be required for submission.
If you would like to subscribe to the Jere Beasley Report digital edition, simply visit our Subscriptions page and provide the necessary information or call us at 800-898-2034.
Attorney Advertising - Prior results do not guarantee a similar outcome.