Ending Blue Cross price setting
On the state Senate calendar for a second reading tonight is Senate Bill 359, which prohibits health insurers from using “most favored nation” clauses in contracts with health care providers.
Though not stated directly in the bill, the prohibition will directly impact Blue Cross Blue Shield of North Carolina, which is the subject of a class action suit, Cerven v. BCBSNC, concerning its use of those clauses and other alleged anti-competitive conduct. The action was originally filed in federal court in Statesville in February 2012 but later transferred to a multidistrict panel in Birmingham, Ala., joining 40 similar cases filed against Blue Cross entities around the country.
As we noted in a previous post:
The lawsuits come at a time when Blues across the country are under attack for their use of “most favored nation” clauses, which require providers to charge other insurers as much or more for services than they would charge a BCBS group. Critics say that the MFNs effectively allow BCBS to set the floor on pricing, undercutting other insurers and eliminating them from the market.
The company reported lower profits for last year, which it attributed to its preparation for the full implementation of the Affordable Care Act.