Telemetry Device Maker’s Boycott Claim Against BCBS Flatlines

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By Eleanor Tyler

Blue Cross Blue Shield Association’s refusal to cover telemetry monitoring for arrhythmia patients isn’t a boycott under the antitrust laws, according to an April 3 order from a Pennsylvania federal court ( LifeWatch Servs., Inc. v. Highmark, Inc. , 2017 BL 108502, E.D. Pa., CIVIL ACTION NO. 12-5146, 4/3/17 ).

The case illustrates the limitations of antitrust law on big buyers. The judge said that although Blue Cross, or BCBS, covers about half of all privately insured Americans, telemetry provider LifeWatch Services Inc. didn’t establish that the insurer’s refusal to pay for telemetry services harmed competition since all telemetry providers are treated the same under the insurer’s policies.

LifeWatch complained that despite ample scientific evidence supporting the efficacy of telemetric monitoring of patients with abnormal heart rhythms, BCBS plans have conspired to deny coverage for telemetry devices and services. That decision is centrally set for all the insurer’s plans by a “medical policy panel.” Any plan that fails to conform to panel decisions on coverage can be severely punished through BCBS’s uniformity rule.

Legal Use of Single Buyer

Judge Eduardo C. Robreno dismissed LifeWatch’s claim that BCBS and its member plans conspired to restrain trade. He held instead that BCBS’s decision not to pay for telemetry monitoring for any covered patient is a legal use of BCBS’s single buyer power in health insurance.

BCBS contended that LifeWatch’s claims failed for several reasons, including market definition, standing and exemptions for insurance in the antitrust laws. The court didn’t respond to those arguments. Instead, Robreno said that LifeWatch simply failed to allege anticompetitive conduct that the antitrust laws are designed to prevent.

Services Treated Equally

Because BCBS treats all telemetry service providers equally, Robreno said that BCBS’s refusal to cover those services does not reduce competition in the market. Instead, Robreno reasoned that BCBS plans “have simply decided -- whether in a concerted fashion or not -- that the benefits of telemetry devices do not (yet) outweigh their costs.” He likened the decision to a single buyer’s power within the law to “bargain aggressively” with suppliers on price.

LifeWatch has had three chances to plead a viable antitrust claim and failed. For that reason, court declined to give the plaintiff another chance to amend the complaint. Robreno dismissed the suit.

Highmark Inc., the only individual BCBS plan that LifeWatch sued, settled in June 2016 in return for a reduction in a $22 million award Highmark won against LifeWatch in an arbitration over billing practices. LifeWatch still owed Highmark $13 million from that separate arbitration between the parties.

To contact the reporter on this story: Eleanor Tyler in Washington at etyler@bna.com

To contact the editor responsible for this story: Fawn Johnson at fjohnson@bna.com

For More Information

The court's decision is at http://src.bna.com/nCu.

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