By Harris Meyer
April 6, 2018
A federal district judge handed Blue Cross and Blue Shield insurers a setback Thursday in a major lawsuit over their practice of creating exclusive territories, ruling the deals could directly violate antitrust law.
U.S. District Judge R. David Proctor of the Northern District of Alabama determined that healthcare providers and consumers have shown that some of the practices of the Blue Cross and Blue Shield Association and its 36 member plans should be reviewed as “per se” violations of federal antitrust law if the case goes to trial.
The judge said the combination of the Blues plans’ exclusive territories, in which they agreed not to compete, and the agreement to limit competition on non-Blues branded products, is a per se violation of the Sherman Antitrust Act.
The decision is a major setback for the Blues and makes it easier for providers and consumers to prove that the plans impede competition by offering insurance coverage in exclusive markets. The Blues had hoped Judge Proctor would look at their practices and all the circumstances surrounding them before determining during trial if they violated federal antitrust law.
The decision wasn’t all bad news for the Blues. Judge Proctor said there are disputed issues of fact over whether the Blues organization is a single entity that will have to be tried. If the Blues prevailed in a trial on that issue, the organization can’t have conspired to restrain trade under the law.