Federal prosecutors seek settlement of Blue Cross antitrust case

2012-03-06T13:11:00Z Federal prosecutors seek settlement of Blue Cross antitrust caseThe Associated Press The Associated Press
March 06, 2012 1:11 pm  • 

HELENA – Federal prosecutors have asked a judge to approve an antitrust settlement involving two Montana health insurers now that one of the companies has been broken up as part of the deal.

U.S. Justice Department attorneys filed their request Monday asking U.S. District Judge Richard Cebull to sign the final judgment in the case against Blue Cross and Blue Shield of Montana “as soon as possible.”

“The court should find that the proposed final judgment is in the public interest and should enter the final judgment without further hearings,” prosecutors Scott Fitzgerald and Claudia Dulmage wrote.

The order by Cebull would end the lawsuit that accused Blue Cross, the state’s largest insurer, of anticompetitive practices in its $26.3 million buyout of New West Health Services’ approximately 11,000 hospital employee policyholders.

Blue Cross had proposed paying that amount to five of the six hospitals that own New West if they switch their employees’ insurance. Blue Cross also agreed to give the hospitals two seats on its board of directors if hospitals agreed not to compete with Blue Cross in the sale of commercial health insurance.

Prosecutors say the deal would have driven New West out of the commercial insurance business and allow Blue Cross to gain greater dominance in those five hospital markets: Billings, Bozeman, Missoula, Havre and Helena. That likely would have led to price hikes and a reduction in services, they said.

Blue Cross officials did not immediately return a call for comment on Tuesday.

The settlement allowed the Blue Cross deal to go through if an outside company bought New West’s commercial business so that competition remains in those markets.

The deal for PacificSource Health Plans to take over New West’s approximately 8,500 commercial policy holders was finalized on Feb. 29, according to the Oregon-based insurance company.

That deal, worth up to $1.5 million depending on the final number of policy holders who ultimately switch to PacificSource after a yearlong transition period, was approved last month by Securities and Insurance Commissioner Monica Lindeen.  

New West, having shed its hospital and commercial insurance policies, will focus on its Medicare Advantage business.

AP-WF-03-06-12 2011GMT

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