Lane Regional Medical Center has filed a federal lawsuit against all of the Blue Cross plans outside Louisiana, alleging the Zachary hospital received lower payments because the health plans illegally conspired to fix prices at artificially low levels.
Lane Regional said the lawsuit, filed Friday in Baton Rouge, is intended to force the Blue Cross plans outside the state to compete with Blue Cross and Blue Shield of Louisiana. Lane expects its lawsuit will be combined with antitrust lawsuits filed in Alabama against all of the Blue Cross plans. Those lawsuits claim the Blues acted as an illegal cartel, driving up prices for consumers while lowering payments to doctors and hospitals.
The Blues have denied those allegations. The national Blue Cross association says its members are independent, community-based and locally operated health plans. A number of courts and regulatory agencies have validated the Blues’ business model.
However, Joe Whatley, lead attorney for the Alabama multidistrict litigation, and co-counsel Lance Unglesby say the Blues’ anticompetitive behavior meant Lane was paid less for its services than it should have been.
Lane’s lawsuit was prompted in part by worries that increasing consolidation among health insurers will mean less choice for consumers and less bargaining power for health care providers. Anthem, the largest of the Blues, recently struck a $48 billion deal to purchase Cigna.
Whatley said he did not have an estimate of the Blues’ anticompetitive impact on Lane but the damage to hospitals nationwide amounted to billions of dollars.
The Anthem-Cigna merger is the most recent development in a decadeslong trend among insurers, especially the Blues.
“When they started what they call their long-term business strategy back in the early ’80s, they had well over 100 Blues. Now we’re down to 36,” Whatley said. “Every time we turn around, there’s one less. So yeah, it’s a huge problem for providers.”
Anthem and Cigna have pitched the deal as good for consumers, saying the combined company would generate $2 billion in cost cuts over two years.
But critics, like the American Hospital Association and Whatley, say there is little chance those savings will be passed along to consumers.
Follow Ted Griggs on Twitter, @tedgriggsbr.