Blue Cross Blue Shield of Michigan responds to Aetna's "piggyback" lawsuit that seeks to restrict BCBSM's ability to obtain the best possible rates from Michigan hospitals

December 9, 2011

DETROIT — Blue Cross Blue Shield of Michigan said the civil lawsuit by Hartford-based Aetna is without merit. The lawsuit piggybacks on litigation by the Department of Justice and seeks to restrict BCBSM’s ability to receive the best possible discounts for hospital services for customers.

Aetna is a BCBSM competitor that pulled out of the small group market in Michigan instead of investing in the state like BCBSM does.

“Aetna is not making the types of investments here it needs to compete successfully. Instead, Aetna is resorting to litigation as a business strategy to tear down a competitor that is invested here,” said Andrew Hetzel, BCBSM vice president of Corporate Communications. “Blue Cross is succeeding in Michigan by providing more health care value for our customers’ dollar. Our discounts – fairly negotiated with hospitals – are part of that value.”

BCBSM will vigorously defend its ability to negotiate the deepest possible discounts with Michigan hospitals for its members and customers, said Hetzel.

”Our customers and 4.3 million members expect that BCBSM negotiate the best hospital prices for them. This allows businesses to provide health coverage for their employees, and create and protect jobs. It allows families to better afford health care expenses. We won’t apologize for advocating for our members’ best interests,” said Hetzel.

Because BCBSM represents more members in Michigan than its competitors do, it expects Michigan hospitals to give the company better discounts than they give to competitors because of the volume of BCBSM members. Negotiated hospital discounts are an important tool that BCBSM uses to protect the affordability of health insurance for millions of Michigan residents. The cumulative savings effect of BCBSM discounts with hospitals and professional providers and pharmacies, and other medical providers, was around $13 billion in 2009.

BCBSM is working to provide more health care value for the dollar and has seen significant success in holding down health care cost growth in Michigan. The White House issued a report in 2010 that showed Michigan's rate of growth in family health care premiums was the lowest in the country over the last 10 years. Additionally, a report by the Michigan Office of Financial and Insurance Regulation concluded that Michigan had a competitive insurance market.

“Blue Cross has a motivation to keep health care affordable because it's consistent with our mission and because we are Michigan-centric. Michigan is our home, not a market,” said Hetzel. “In contrast, Aetna's motivation is profit driven, and it participates in the markets where this can happen most cost-efficiently. This is why it has pulled out of Michigan's small group market.”

Aetna has a membership that is seven times the size of BCBSM and can reject individuals for insurance based on their health status. Nonprofit BCBSM accepts individuals who apply for coverage regardless of their health status.

Blue Cross Blue Shield of Michigan is nonprofit and an independent licensee of the Blue Cross and Blue Shield Association.

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