Large hospitals and health systems have filed a spate of antitrust suits against various Blue Cross and Blue Shield (BCBS) carriers, including Elevance Health and Health Care Service Corp. These plaintiffs in the recent lawsuits are those health system giants that opted out of the $2.8 billion antitrust settlement that BCBS agreed to last fall. They had until March 29, 2025, to reject the settlement and file suit.
The plaintiff health systems, which include Adventist Health, Bon Secours Mercy Health, CommonSpirit Health, Community Health Systems, Temple University Health, and the University of Pennsylvania Health System, allege that BCBS insurers and managed care companies colluded to limit competition in the health insurance market. The BCBS Association member companies allegedly colluded in violation of antitrust laws by forcing them to avoid operating in other members' home markets or “exclusive service areas.”
Since the BCBS Association controls the BCBS trademark, companies use the BCBS name when conducting business in some areas and refrain from using the name when conducting business in others. BCBS has a “national best efforts rule,” which encourages member companies to earn no more than 33% of their revenue from selling non-BCBS-branded products.
In its suit, Temple University Health also objected to the BCBS “local best efforts rule,” which requires that their member companies earn at least 80% of their revenue in their home markets from the sale of BCBS-branded products.
These lawsuits are emblematic of the universal complaint of healthcare providers about their inability to get fair reimbursement deals due to the lack of market competition among insurers. In response, insurers say that the issues stem from a lack of competition in the hospital and healthcare provider practices.
However, the impact of this battle on employers is unclear. Success in these lawsuits could help reduce costs created by the allegedly illegal competition. Nonetheless, success also could reduce the ability of the BCBS member companies to negotiate with hospitals for lower prices. Success could also eliminate or reduce BCBS plan characteristics that make them appealing to employees, such as large provider networks and national network access programs, which offer an easy way to find care outside the employees' home markets.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
