Judge: The way BCBS plans operate could automatically violate antitrust laws

A federal judge ruled litigation against Blue Cross Blue Shield insurers showed how they do business may be an automatic violation of federal antitrust regulations, according to The Wall Street Journal.  

Here are five things to know about the litigation.

1. In an April 5 ruling, U.S. District Judge R. David Proctor said provider- and member-sponsored litigation claiming the Blue Cross Blue Shield Association and its 36 members worked together under competitive restrictions, when considered altogether, may be a "per se" violation of the Sherman Act. The Sherman Act is the federal law banning unlawful trade restraints.

2. Specifically, the litigation argues the insurers unlawfully conspire to divide markets and avoid competition with one another. This, in turn, results in higher consumer prices and lower provider payments, the litigation alleges.

3. While the case faces a long road — the lawsuits against BCBS insurers haven't gained class-action status, and the judge left a potential defense for the payers' operations — it establishes legal outlines in a future trial, WSJ reports. Mr. Proctor's ruling of a possible "per se" violation could make it difficult for the BCBS' insurers to prove their practices don't violate law.

4. Tim Greaney, a professor at San Francisco-based University of California Hastings College of the Law, told the publication the ruling is "a pretty serious blow to the Blues."

5. BCBSA and its 36 companies plan to appeal the decision. Scott Nehs, general counsel for BCBSA, told WSJ the insurers are "confident that we will prevail" and "disappointed by the court's ruling with respect to certain aspects of the BCBS System."

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