Antitrust Law Daily Wrap Up, ANTITRUST NEWS: Health care providers accuse Blue Cross of market allocation and price-fixing conspiracies, (Jul 17, 2015)

By Edward L. Puzzo, J.D.

A class of health care providers is accusing various Blue Cross and Blue Shield health insurance companies of engaging in market allocation and price-fixing conspiracies, according to a complaint filed in the federal district court in New York City (Conway v. Blue Cross and Blue Shield of Alabama, July 16, 2015).

Jerry L. Conway, a chiropractor, and a number of other in-network health care providers filed a class action complaint against the “Blues”, various Blue Cross and Blue Shield independent health insurance companies belonging to the Blue Cross and Blue Shield Association, accusing them of engaging in an illegal market allocation, horizontal price-fixing, and boycott conspiracy; reducing the competition that each Blue faces which reduces the prices it pays to health care providers; fixing the prices for all Blues; and collectively boycotting all providers outside their exclusive geographic markets, or “service areas.”

The defendants are accused of conspiring to divide and allocate the geographic markets for the finance of health care into a series of exclusive areas for each of the Blue Cross companies, and of dividing and allocating the geographic markets where provider reimbursement rates are determined. By doing so they are alleged to have suppressed competition and decreased the rates paid to health care providers. It is further alleged that as a result of defendants’ actions, health care providers who choose to not be in-network have an extremely limited market for the health care services they provide.

The complaint alleges that the Blues’ market allocation conspiracy and price-fixing and boycott conspiracy violate Section 1 of the Sherman Act under a per se, quick look or rule of reason analysis, as well as Section 2. Plaintiffs allege continuing injury from these violations and seek a permanent injunction preventing the defendants from continuing to act in concert in these conspiracies. Plaintiffs further allege that the defendants willfully created and maintained a monopsony in the market for healthcare services in certain geographic areas.

In addition to the permanent injunction, plaintiffs seek treble damages and interest under Section 1 of the Sherman Act for both the market allocation and price-fixing and boycott conspiracies under the per se, quick look and rule of reason analysis, and for the monopsony claim.

The case is Civil Action No. 1:15-cv-05539.

Attorneys: Edith M. Kallas and Joe R. Whatley, Jr. (Whatley Kallas, LLP) for Jerry L. Conway.

Companies: Blue Cross and Blue Shield Association

News: Antitrust NewYorkNews