Blue Cross Oxendine Clash Over Health Care Pricing

[Mimosa]

Source: Atlanta Journal Constitution


Georgia Politics 5:20 a.m. Monday, December 6, 2010
Blue Cross, Oxendine clash over health care pricing

By Carrie Teegardin

The Atlanta Journal-Constitution

Blue Cross Blue Shield of Georgia, the state's largest health insurer with 2.5 million members, has such a strong grip on the market that it does not permit hospitals to make better deals with other health insurers. This practice, a routine demand in Blue Cross's contracts with hospitals, means that Blue Cross customers get the lowest prices for hospital stays and related expenses. But some say it also means that the insurance giant uses its clout in the market to restrain competition and keep prices high.

"I don't care if you're a Republican or a Democrat, every American agrees that health care costs too much and we need to reduce the cost of health care," said state Insurance Commissioner John Oxendine. "To have contracts that legally prevent someone from lowering their health care costs . . . that's pretty unconscionable."

Oxendine says that such contractual requirements are not legal in Georgia and, in July, warned Blue Cross and the state's other insurers to strip such clauses from their contracts.

Blue Cross refused. Instead, the company filed a lawsuit against Oxendine saying the contract clauses were not only legal, but beneficial to consumers. The case is pending in court.

Blue Cross declined to make company officials available for interviews with The Atlanta Journal-Constitution.



Read more: http://www.ajc.com/news/georgia-politics-elections/blue-cross-oxendine-clash-767882.html

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Blue Cross/Blue Shield (long ago a non-profit health insurance chain) is currently owned by the mega-corporation Wellpoint. Isn't Wellpoint the company which made Rick Scott a billionaire?

Read the article at the link for details on the case filed in Michigan by the Justice Department against Blue Cross of Michigan.

The contract clause being challenged is known as a "most favored nation" or "most favored customer" provision.Some insurers argue that the clauses help consumers get the lowest possible price, many regulators now believe that this tactic stifles competition and innovation and pushes costs up.

In October, the Justice Department filed a high-profile antitrust lawsuit against Blue Cross Blue Shield of Michigan over its use of "most favored nation" clauses. The government contends that Blue Cross, which dominates the Michigan insurance market, used the provisions unfairly and even required some hospitals to charge competitors higher rates -- sometimes as much as 30 to 40 percent more.

[Alcibiades]

1. Some of the Blue Crosses are still nonprofit

http://en.wikipedia.org/wiki/Blue_Cross_Blue_Shield_Association

Most of them, in fact. Still, they act like for-profit companies, that's for sure.