Pennsylvania probing Blues' trade practices

The Pennsylvania Insurance Department is launching an investigation of the states four Blue Cross and Blue Shield Assn. affiliates to determine if any engaged in unfair trade practices. Even though Highmark Inc. and Independence Blue Cross withdrew their consolidation proposal earlier this year, anticompetitive dynamics remain at play in Pennsylvania health insurance marketplace, Insurance Commissioner Joel Ario said in a statement.
The purpose of these four examinations is to determine whether there are any anti-competitive practices that violate current law and, if so, to take steps under the law to remedy the effects on competition, Mr. Ario said. In addition to Highmark and Independence, other plans that will be investigated are Blue Cross of Northeastern Pennsylvania and Capital BlueCross. Investigators from Pennsylvanias Insurance Department will review each companys data and business agreements. Investigators also will study the states competitive dynamics to determine things such as whether the four Blues plans use their market power to unfair advantage in areas that include provider contracting. All four of the Blues plans said they would cooperate with the investigation, but three of them added they are disappointed the commissioner is pursuing such action at a time when momentum is building in Washington to reform health care. Those three plans Highmark, Independence and Capital BlueCross also issued statements saying the Pennsylvania market is competitive and that the examinations would put additional cost burdens on the plans that eventually would trickle down to plan members. Blue Cross of Northeastern Pennsylvania said it welcomed state regulators periodic reviews of market conditions, saying the public can only benefit from more information and understanding about how the insurance industry works in Pennsylvania, which is the only U.S. state with four Blues plan.