Did Blue Cross cause Alabama hospitals to close? A federal judge wants to know

A group of healthcare providers filed a federal lawsuit last year, claiming Blue Cross and Blue Shield insurers are engaging in cartel-like behavior by divvying up markets to avoid competing against one another. BCBS of Alabama is included in the multidistrict litigation, and a federal judge has made some demands on the healthcare providers for the case to proceed.

The lawsuit focuses on the licensing agreements the Blue Cross Blue Shield Association has with insurers, which usually involve companies having exclusive rights to the Blue Cross and Blue Shield names within a certain region. The healthcare providers claim the association's agreements lead to decreased competition causing them to be paid much less.

In a motion to compel filed in late 2015, BCBS of Alabama claims plaintiffs are withholding documents related to one of the primary allegations in their case. Specifically, the insurer alleges plaintiffs are refusing to produce documents supporting the allegation that BCBS of Alabama's conduct has caused a loss of provider services, including the closure of unidentified rural hospitals.

U.S. Magistrate Judge T. Michael Putnam granted BCBS of Alabama's motion last Thursday, and ordered plaintiffs to produce any documents that support the allegation that the insurer's antitrust conduct has caused hospitals or other healthcare facilities to close. The judge gave the plaintiffs 10 days to produce the documents.

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