LANSING, Mich., Oct. 18 (UPI) -- Blue Cross Blue Shield of Michigan denied Justice Department charges it had agreements with hospitals that raised prices for consumers.
The Department of Justice suit filed suit Monday, saying Blue Cross Blue Shield had made deals with acute care hospitals that "stifle competition, resulting in higher health insurance prices for consumers in Michigan."
The lawsuit says Blue Cross Blue Shield deals prevent hospitals from billing other insurance companies at rates lower than Blue Cross Blue Shield receives, The Detroit News reported.
"Our responsibility in contracting with hospitals is to negotiate on behalf of our members and customers, not to negotiate against other health plans," said Andrew Hetzel, Blue Cross Blue Shield vice president of corporate communications.
Hetzel also said the contracts mandate hospitals give its customers the "deepest possible discount."
With 4 million members, however, that forces hospitals to charge other insurance companies more.
"The investigation showed that Blue Cross increased its payouts to many hospitals to guarantee the hospitals would in turn charge all other insurers up to 40 percent more, pricing them out of the market and raising prices on all Michigan consumers," the state's attorney general's office said.
"These greedy deals are hardly what the legislature had in mind when it created Blue Cross. We need more competition to keep prices down, but with the support of our tax dollars, Blue Cross is doing everything it can to kill its competition," Michigan Attorney General Mike Cox said.
