A lawsuit alleging Blue Cross companies of conspiring in Alabama and across the country to illegally stifle competition will continue after a judge’s ruling filed Wednesday.
U.S. District Judge David Proctor in Birmingham denied motions by Blue Cross/Blue Shield plans, which are independent companies across the United States, to have antitrust case thrown out.
“The court has not attempted to reference (much less address) all of the details regarding plaintiffs’ allegations about the alleged scheme,” the judge wrote addressing one of multiple arguments. “But the contentions … make clear that plaintiffs have alleged a viable market allocation scheme. If that scheme is proven, it may subject defendants to antitrust liability.”
The lawsuit, originally filed 2012 by an Alabama chiropractor and consolidated with similar suits, is being brought by Blue Cross subscribers and health care providers against about three dozen Blues, including Blue Cross and Blue Shield of Alabama which has the largest market share in a single state of any insurer in the country.
The class action lawsuit alleges violation of federal antitrust laws through a “complete lack of meaningful competition” within markets across the United States where Blue Cross businesses sell insurance.
The Blue Cross businesses, although independently run, are linked by an association with a board of directors that sets up the anti-competitive agreements, the lawsuit alleges.
Blue Cross lawyers filed the motion to dismiss the lawsuit in October, saying the defendants failed to make viable claims on a number of allegations.
In January, 14 law professors from around the country filed “a friend of the court” brief in in opposition to the Blue Cross motion to dismiss the lawsuit.
Blue Cross plans have said through its association that the lawsuit is without merit.
“Given the early stages of the litigation, Judge Proctor’s ruling on the motion to dismiss is not surprising,”‘ said Robert Sholars, spokesman for Blue Cross and Blue Shield Association. “We are encouraged by the Court’s thorough consideration of the matter. We appreciated the opportunity to detail the history and structure of the Blue system and, as the legal process continues, look forward to presenting the merits of our case.”
Plaintiff’s attorney Joe Whatley issued this statement:
“We are very pleased with Judge Proctor’s well-reasoned order. This case presents an opportunity to create real competition in for health insurance in our country. The order is the first step toward improving our healthcare system for providers of healthcare as well as consumers.”
Date: June 20, 2014