Blues Hearing To Focus On “Most-Favored-Nation” Clauses

Nov 19, 2012

Hearings continue at the state Capitol on overhauling Blue Cross-Blue Shield of Michigan. The discussion will focus on how Blue Cross has used its market power to keep its costs lower than its competitors.

The Michigan Capitol.
Credit File photo / WKAR

Today’s hearing will focus on contract clauses that require hospitals to give Blue Cross a better deal than they offer other insurers. Health care providers could not say “no” because Blue Cross is by far the state’s largest health insurer.

Other insurance companies say Blue Cross should not be allowed to use its leverage to gain that kind of advantage. State Attorney General Bill Schuette and the US Justice Department sued Blue Cross.

The state insurance commissioner reined in that practice last year, forbidding what’s called “most-favored nation” clauses without his prior approval. But Blue Cross’s competitors want a ban written into the law that will overhaul Blue Cross.

Governor Rick Snyder and legislative leaders want that wrapped up before the end of the year so Blue Cross is able to operate under the new federal healthcare law.