On April 5, 2018, a Federal court held that Blue Cross health insurance plans’ “aggregation of a market allocation scheme” will be analyzed under the per se standard of antitrust review, which treats categories of restraints of trade as illegal, in the multidistrict antitrust litigation, In re: Blue Cross Blue Shield Antitrust Litigation (MDL No.: 2406), No. 2:13-CV-20000-RDP, at 59 (N.D. Ala. Apr. 5, 2018). The court also held that the alleged BlueCard violations will be analyzed under the rule of reason standard, which “requires the court to weigh all of the circumstances surrounding the practice to determine whether it unreasonably restrains competition.” Id. at 23, 59.
In their summary judgment papers, the provider and subscriber plaintiffs asserted that defendant Blue Plans committed a per se violation of the Sherman Act when they “agreed to allocate geographic markets for the sale of commercial health insurance and/or commercial healthcare financing services.” Id. at 35. The court held that the plaintiffs presented “evidence of an aggregation of competitive restraints – namely, the adoption of [exclusive service areas] and, among other things, best efforts rules – which, considered together, constitute a per se violation of the Sherman Act.” Id. at 37.
The provider plaintiffs also challenged defendants’ BlueCard program as constituting a horizontal price fixing agreement and a group boycott. Id. at 49. With respect to the price fixing claim, the court held that the provider plaintiffs did not “present a classic price fixing scheme,” where “the competitors preset prices for purchasing goods between themselves.” Id. at 52. Rather, the court found that the “cooperative integration at the heart of the BlueCard program requires more detailed review.” Id. at 53. Specifically, the court held that, given the possible procompetitive benefits of the BlueCard program, the price fixing claims should be analyzed under the rule of reason. Id. at 53–54. Similarly, with respect to the plaintiffs’ group boycott claim, the court concluded that, because the plaintiffs had not established defendants’ market power over a particular market or demonstrated an element of the market that the Blue Plans exclusively control, it must review the alleged boycott under the rule of reason standard. Id.
The subscriber plaintiffs also argued that the “Association’s restrictions on the use of trade names that have been used in conjunction with a Blue Mark are per se violations of the Sherman Act.” Id. at 55. The court determined that the “uncoupling rules” did not fall within a category of per se restraints because the record did not show “that the uncoupling rules were used to effectuate a per se antitrust violation” and because “the uncoupling rules have potential procompetitive benefits.” Id. at 58.
The Opinion is available here.
