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Maine.gov > PFR Home > Insurance Regulation> Administrative & Enforcement Actions > Document 622 : INS 99-14 : Hearing Decision
STATE OF MAINE
On March 24, 2000, MHA, Inc. [Maine Hospital Association] filed a Motion to reconsider portions of the Superintendents Order of March 22, 2000 (Order on Objections of Anthem and Blue Cross Blue Shield of Maine to Intervenors Designation of Issues). MHA requests that the Superintendent reconsider the following two rulings from the March 22nd Order:
1. That portion of paragraph 12, which deems as irrelevant the portion of MHA issue 5, relating to any specific inquiry on MHAs part into "whether Anthem should be required to continue Maine Blue Cross Blue Shields practice of maintaining a statewide network of providers consistent with historic levels of participation;" and
2. Paragraph 15, which deems as irrelevant MHAs issue 8, relating to "whether most favored nation requirements should be prohibited in Anthem provider contracts."
The Superintendent has reconsidered the two rulings from the March 22nd Order and rules as follows:
1. Reconsideration of Ruling on a Portion of MHA issue 5. MHA moves for the Superintendent to reconsider that portion of paragraph 12 of the March 22nd Order which deems as irrelevant portion of MHA issue 5 relating to any specific inquiry on MHAs part into "whether Anthem should be required to continue Maine Blue Cross Blue Shields practice of maintaining a statewide network of providers consistent with historic levels of participation." MHAs motion for reconsideration of this portion of paragraph 12 of the March 22nd Order is hereby DENIED.
In designating the issue of whether Anthem should be required to continue Maine Blue Cross Blue Shields practice of maintaining a statewide network of providers consistent with historic levels, MHA explains that it "seeks a protective window of three years [for existing provider agreements]" beyond Anthems agreement to continue the existing provider agreements for their current contract term. In the absence of this transaction, the providers currently do not have any guarantees, or "protective windows," concerning future contract terms with Maine Blue Cross and Blue Shield. Subject to the requirements of the Maine Insurance Code and other applicable laws, insurers in this State currently are free to negotiate terms with providers at the time of contract renewal. The negotiation of contracts between private parties, other than as to specific statutory provisions, is not an issue for consideration by the Superintendent in this proceeding.
2. Reconsideration of Ruling on MHA issue 8. MHA moves for the Superintendent to reconsider Paragraph 15 of the March 22nd Order which deems as irrelevant MHAs issue 8 relating to "whether "most favored nation" requirements should be prohibited in Anthem provider contracts." MHAs motion for reconsideration of paragraph 15 of the March 22nd Order is hereby DENIED.
By designating the issue of whether Anthem should be precluded from having most favored nation clauses in their provider contracts, MHA appears to believe that such clauses are per se illegal or, at least, should be considered anticompetitive as a matter of course. That position is not supported by relevant caselaw. Rather, courts have found that whether a most favored nation clause violates Section 1 of the Sherman Antitrust Act is highly fact specific. The government, or private party, must prove there is a "contract, combination or conspiracy among two or more parties, that unreasonably restrains trade." See Blue Cross and Blue Shield of Ohio v. Klein, 117 F.3d 1420, 1997 WL 400095 (6th Cir. Ohio)(July 11, 1997). It is the "rule of reason" which is applied rather than a presumption of "per se illegality." Id.
In analyzing the anticompetitive effects of most favored nation clauses a factfinder would consider the market share of the company, the substance of the clause, the extent to which the company enforces the clause, the purpose behind inclusion and enforcement of the clause, and the resulting anticompetitive effects. See United States v. Medical Mutual of Ohio, 1999 WL 670717 (N.D. Ohio)(Jan. 29, 1999). The Superintendent finds that it would be inappropriate to consider whether to preclude, altogether, most favored nation clauses in Anthems provider contracts as part of this proceeding. Rather, that is a policy issue to be considered by the Legislature when, and if, it chooses to undertake such a consideration. Should Anthem include most favored nation clauses in its provider contracts, assuming this transaction were to be approved, the Attorney General has the authority to monitor, investigate, and enforce the antitrust laws.
PER ORDER OF THE SUPERINTENDENT OF INSURANCE
DATED: March ___, 2000
ALESSANDRO A. IUPPA
Superintendent of Insurance
Last Updated: January 21, 2014
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