BCBS Michigan beats 'Blues Conspiracy' antitrust allegations over anesthesiology rates

A federal judge dismissed a claim Dec. 29 against Blue Cross Blue Shield of Michigan from the Anesthesia Associates of Ann Arbor (A4) over an alleged decadeslong scheme to control the state's anesthesia market.

A4 originally sued BCBSM in 2020, accusing it of violating state and federal laws by purposefully driving down reimbursement rates for anesthesiologists through its dominant market position — thereby lowering care quality and raising prices on consumers.

The original lawsuit was struck down in 2021 because there was no evidence of predatory pricing. In an amended suit filed Sept. 28, 2022 in a Michigan federal court, the judge struck down a claim described as the "Hospital Conspiracy," or an alleged scheme where hospitals and BCBSM agreed not to use A4 because it had left BCBSM's network. He allowed the case to move forward however, under the "Blues Conspiracy." 

The Blues Conspiracy accused BCBSM of working with other BCBS affiliates to dominate the market and not compete within each other's geographic service areas — the judge dismissed the claim Dec. 29.

"..even if A4's state law claims had a sufficient factual relationship to the Blues Conspiracy, the Court has discretion to decline supplemental jurisdiction where the state law claims will 'substantially predominate over' the federal claims," the judge wrote.

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