Blue Cross Blue Shield of Michigan, U.S. Department of Justice and State of Michigan jointly file to dismiss Antitrust case

March 25, 2013

DETROIT – The U.S. Department of Justice, State of Michigan and Blue Cross Blue Shield of Michigan today filed a joint motion with the U.S. District Court in Detroit to dismiss an antitrust lawsuit filed against BCBSM over the use of Most Favored Nation clauses in some hospital contracts.

The parties have agreed that the injunctive relief sought by the DOJ and State of Michigan is now unnecessary in light of the enactment of state legislation (2013 P.A. 4 and 2013 P.A. 5), which bans the use of Most Favored Nation clauses by the health insurance industry in Michigan as of Jan. 1, 2014, and an order of the Michigan Insurance Commissioner that MFNs in any health insurer’s contracts are unenforceable as of February 2013.

"Our consistent position has been that Michigan regulators exercise sufficient control over the use of MFN provisions between health insurers and hospitals," said Jeffrey Rumley, BCBSM vice president and general counsel. "The recent signing of legislation by our Governor which prospectively prohibits all carriers from using MFNs, as well as a prior order of the Insurance Commissioner prohibiting any insurer's use of MFNs absent prior approval, confirms this authority and renders moot any further need for the Justice Department and the State to pursue the case. Blue Cross is pleased that the Justice Department and the State join with us today in bringing this matter to a close."

The company will continue its mission-focused efforts to negotiate reimbursement arrangements with hospitals that contain health care cost growth while providing access to care.

"Most-favored nation contract language was one tool – but certainly not the only tool – that Blue Cross leveraged in our reimbursement arrangements to ensure high-quality care at reasonable cost," said Andrew Hetzel, BCBSM vice president for corporate communications. "As we move forward, the Blues are working with hospitals to focus our reimbursement on outcomes-based quality measures. We are leading our industry away from fee-for-service and into the era of value-based reimbursement. These efforts form the foundation of a new approach to health care value that our stakeholders and customers are eager to embrace. Most-favored-nation language is not part of the future model that we strive to create here in Michigan."

Blue Cross Blue Shield of Michigan is a nonprofit corporation and independent licensee of the Blue Cross and Blue Shield Association. For more information, visit http://bcbsm.com

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