The Department of Justice (DOJ) is expanding its antitrust investigation of Blue Cross plans’ use of most favored nations (MFN) clauses beyond Michigan into other states, according to media reports. DOJ and the State of Michigan filed a civil antitrust suit against Blue Cross Blue Shield of Michigan in October 2010 seeking to prohibit the Michigan Blue Cross plan from including or enforcing MFN clauses in its contracts with Michigan hospitals as an unreasonable restraint of trade under the Sherman Act. King & Spalding’s Health Headlines analyzing the Michigan lawsuit is available by clicking here.
A DOJ spokesperson reported to the Wall Street Journal that “[t]he antitrust division is investigating the possibility of anticompetitive practices involving MFN clauses in various parts of the country,” but declined to specify particular states or companies of interest. In response to that announcement, several media sources report that representatives for Blue Cross plans operating in Washington, D.C., Maryland, Northern Virginia, South Carolina and West Virginia confirmed recently receiving inquiries from the DOJ. Blue Cross plans in Ohio, Missouri and West Virginia also confirmed receiving civil investigative demands from state agencies. Representatives for the Kansas and North Carolina Blue Cross plans declined to confirm whether the plans received investigative demands.
This expansion of DOJ’s and the States’ investigations aligns with the DOJ’s warning in October 2010 that its interest in MFN clauses could expand beyond Michigan. After announcing the Michigan probe, Assistant Attorney General for the Antitrust Division, Christine Varney, remarked: “[L]et me be clear, we will challenge similar anticompetitive behavior anywhere else in the United States.” It remains to be seen whether DOJ and the States will conclude that the other Blues Plans’ conduct also merits the initiation of antitrust litigation of the type pending against Michigan Blue Cross.