On February 23, Montana Insurance Commissioner Monica Lindeen approved a proposal by New West Health Services, a Montana health insurer, to transfer almost 10,000 insureds to PacificSource Health Plans.  The transfer was required by the DOJ Antitrust Division to settle an antitrust action brought by the DOJ late last year against New West and Blue Cross of Montana.  In that action, the DOJ contended that New West’s sale of another part of its commercial insurance business to Blue Cross of Montana would likely have caused New West to exit that market, and that the elimination of New West as a competitor would have ultimately led to higher prices and lower quality service for consumers.  Accordingly, the DOJ required that New West sell the remainder of its commercial insurance business to a third party insurer that would step in and replace New West as a viable competitor to Blue Cross.

In announcing her approval of the deal, Commissioner Lindeen stated that “New West customers will keep the same benefits under PacificSource as they had under New West,” and that “This agreement preserves the range of options available to Montanans in our health insurance market.”  Her decision follows a February 7 hearing at which representatives of New West and PacificSource laid out the terms of the proposed agreement, and at which no opposition to the proposal was voiced.

The Commissioner’s approval of the New West divestiture to PacificSource was the last step necessary to implement the DOJ’s settlement with New West and Blue Cross of Montana.  Accordingly, the DOJ has now filed a request for final approval of the settlement with the District Court in Montana.  In its papers, the DOJ notes that it received only one comment on the proposed settlement, and that the comment was from the American Medical Association, which applauded the DOJ for “fashioning a remedy that hold[s] the promise of nurturing competition in Montana.”  Judicial approval of the settlement is expected.