In The Shane Group Inc. et al. v. Blue Cross Blue Shield of Michigan, Eastern District of Michigan Judge Denise Page Hood has ruled that a proposed class action may move forward. The putative class claims the health insurance company included anticompetitive most-favored-nation (MFN) provisions in its hospital contracts that required the hospitals to charge rival insurers at least as much as (or more than) Blue Cross in exchange for the insurer’s agreement to pay higher rates. The case rests on allegations similar to those in several other cases including a Department of Justice, Antitrust Division, prosecution. All of the cases rest on the theme that Blue Cross failed to use its dominant position in the insurance market to negotiate lower prices and instead sought to insulate itself from competition while increasing health care costs.
The defendant insurer argued that the plaintiffs could not prove that they were injured by the allegedly anticopetitive MFN clauses. The court held that the defendant’s proposed pleading standard was stricter than that required by either the Supreme Court or circuit precedent. “[T]he detailed and specific facts Blue Cross claims must be alleged in a complaint,” the court explained, are “not required to plausibly allege injury.” The allegation that the plaintiffs purchased services from hospitals covered by the defendant’s MFN provisions were sufficient to allege an injury against the insurer.