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Blue Cross Faces Antitrust Complaint

PHILADELPHIA (CN) - A federal antitrust complaint claims Blue Cross Blue Shield's 38 plans conspire to stifle competition by reducing coverage for services on a unified basis, and refusing to compete with one another.

Named plaintiff Lifewatch Services is a Chicago-based company that sells a cardiac monitoring device.

It claims that were it not for the conspiracy, the Blue Cross plans would have to face formidable competition: other Blue Cross Blue Shield plans.

"Most of the Blue Cross plans are the dominant commercial insurers in their markets, and, were it not for this conspiracy, their greatest competition would come from other Blue Cross plans," the complaint states. "The conspiracy reduces geographic expansion by Blue Cross plans; eliminates competition between the plans for the business of large national corporations who could otherwise choose between them; and (most relevant to this case) eliminates free choice in the use of medical procedures and devices in order to substantially reduce competition in health care quality." (Parentheses in complaint.)

"If Blue Cross plans varied significantly in their overall willingness to cover health care services, this would create competitive points of difference which could result in sophisticated purchasers, including large, national employers, focusing on these differences as reasons to choose one Blue Cross Plan over another," the complaint states.

But the plans do not make independent decisions about which services they will cover and which they won't, Lifewatch says.

Instead, "the Blue Cross plans have tried to the extent possible to minimize the differences between them with regard to the coverage of health care services, and to reduce the coverage of those services on a common basis," according to the complaint.

Lifewatch says the plans collectively establish national policies, aided by a conspiratorial panel that meets at a Chicago hotel roughly seven times a year.

The Blue Cross Blue Shield Association, the 38 plans' national federation, limits the plans' ability to compete outside their geographic service areas, Lifewatch claims.

Rules created by the plans "collectively make it impossible" for the plans "to engage in more than very limited competitive activity in the territories of other" Blue Cross Blue Shield plans, the 36-page lawsuit claims.

Lifewatch says that as a result of the conspiracy, "mobile cardiac outpatient telemetry" services are not available to the "vast majority of the 100 million Blue Cross subscribers."

Lifewatch wants the defendants enjoined from "entering into, or from honoring or enforcing, any agreements that restrict coverage for MCOT [mobile cardiac outpatient telemetry] services," plus costs and treble damages.

Named as defendants are Highmark Inc.; Blue Cross and Blue Shield Association; Wellpoint Inc.; Horizon Blue Cross Blue Shield of New Jersey; Blue Cross Blue Shield of South Carolina; and Blue Cross Blue Shield of Minnesota.

Lifewatch Services is represented by Michael McCarrie, with Artz Health Law in Philadelphia.

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