Blue Cross Blue Shield of Vermont has been named in a class action suit alleging the Blue Cross Blue Shield Association and its regional affiliates violate federal antitrust law.
The suit accuses the association and its affiliates of price-fixing, anticompetitive market allocation and a “boycott conspiracy” that ensures “every other Blue gets the benefit of the artificially reduced prices that each Blue pays to healthcare providers.”
The individual Blue Cross affiliates, such as Blue Cross Blue Shield of Vermont, are often referred to as “Blues.”
The plaintiffs in the suit are health care providers, medical device and equipment makers and people insured by the Blues. VTDigger was not immediately able to confirm if any of the plaintiffs are from Vermont.
The Blues have an “explicit agreement” to divide the country into regional service areas that allows each company to reduce what it pays health care providers, fix those prices across their association and boycott providers outside their service areas, according to an amended complaint filed on Sept. 30.
Each affiliate is an independent company, and if it weren’t for their association, they would compete with one another for market share, according to the suit.
“We believe the claims are without merit and we have joined with the other defendants to vigorously defend against them,” officials from BCBS Vermont said in a statement to VTDigger.
The Blue Cross Blue Shield Association has 37 affiliates in the U.S., which cover more than 105 million people, or one out of three Americans, according to the association’s website.
More than 91 percent of U.S. health care providers and more than 96 percent of U.S. hospitals contract directly with the Blues, according to figures attributed to the association in the legal complaint.
Blue Cross Blue Shield of Vermont is the largest health insurer in the state, covering close to 200,000 Vermonters, or nearly one-third of the state’s population.
The company has significant market power in areas of the state, according to the suit, which cites its 42 percent market share in Burlington and South Burlington as an example.
The class action suit is being litigated in U.S. District Court in Alabama, where it originated.
It’s not uncommon for class action suits to aggregate similar cases from around the country in one jurisdiction, a process known as multi-district litigation, said Ryan Kriger, an assistant attorney general specializing in antitrust cases.
Large-scale nationwide class action suits, such as this one, can take years to resolve, Kriger added.
Earlier this week, the class action monitoring firm Shareholders Foundation Inc. posted a story on the online citizen journalism platform groundreport.com that says, “If you or your organization of fewer than 200 employees purchased health insurance from Blue Cross and Blue Shield of Vermont, you have certain options and you should contact the Shareholders Foundation.”
The vague message does not provide information about the substance of the potential suit, and notes only that an unidentified law firm is investigating Blue Cross affiliates in Vermont, Idaho, Kansas, Montana, South Carolina, North Dakota, Alaska, Nebraska and Washington for possible federal antitrust violations.
The Shareholders Foundation did not return several phone calls and emails from VTDigger this week.
It’s likely that the company is in the business of finding additional plaintiffs for class action suits and was hired by one of the handful of law firms arguing the case.