Blue Cross/Blue Shield accused of hiking Michigan hospital prices

Oct 18, 2010

 Federal and state prosecutors are suing Blue Cross/Blue Shield of Michigan.

 The non-profit health insurance company is accused of violating anti-trust laws. 

When Blue Cross/Blue Shield of Michigan negotiates a contract with a hospital, it includes a provision giving it a discounted rate compared to other health insurance companies. 

Blue Cross insists that allows it to provide its members with discounted hospital stays.    But the US Justice Department and Michigan’s Attorney General’s office disagree.

John Sellek is a spokesman for Michigan’s Attorney General’s office.  He says Blue Cross is actually increasing the cost of a hospital stay in Michigan. 

"At least in 23 instances at major hospitals, and that’s most of the major hospitals in Michigan, Blue Cross said ‘Hey, we’re going to pay you more so that you guarantee that you will charge everyone else more than us.’ " says Sellek, "That means Blue Cross is causing its own customers to pay more."

 Andy Hetzel is a Blue Cross spokesman.   Hetzel denies the allegations in the lawsuit.

 "We believe in what we’re doing, which is negotiating the best possible discounts for our four million plus members who live in Michigan at Michigan hospitals," says Hetzel.  

A Michigan Attorney General’s office spokesman says Blue Cross is using its strength as the state’s largest health insurance provider to muscle out other insurers.