United States v. Blue Cross Blue Shield of Michigan
United States District Court for the Eastern District of Michigan
809 F. Supp. 2d 665 (2011)
- Written by Craig Conway, LLM
Facts
Blue Cross Blue Shield of Michigan (BCBS) (defendant), the largest provider of health insurance products in Michigan, required the inclusion of most favored nation (MFN) clauses in its agreements with various hospitals throughout the state. The MFNs required a hospital to charge BCBS’ competitors more than what BCBS paid, often up to 40 percent higher, or at prices not less than BCBS paid. In some cases, a hospital that refused to enter into an agreement containing an MFN clause was paid up to 16 percent less by BCBS than if the agreement had contained an MFN clause. The United States and the State of Michigan (plaintiffs) filed suit against BCBS in federal district court alleging that the MFN clauses violated § 1 of the Sherman Act and §§ 1 and 2 of the Michigan Antitrust Reform Act. Plaintiffs argued that BCBS’ use of the MFN clauses caused many hospitals to raise its prices to competitors or to demand prices that were too high to allow competitors to effectively compete in the marketplace. BCBS filed a motion to dismiss the complaint.
Rule of Law
Issue
Holding and Reasoning (Hood, J.)
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