US: North Carolina bans most favored nation clauses in healthcare contracts

North Carolina’s legislature has enacted a bill that bans so-called most favored nation clauses within healthcare contracts. The law, entitled “Freedom to Negotiate Health Care Rates,” has yet to be signed by the governor. The bill prohibits a much-debated topic of the practice of health insurance companies entering into agreements many consider to be anticompetitive, in which healthcare providers are barred from doing business with competing insurers. According to reports, the bill aims to allow hospitals to negotiate rates with insurers, and prohibits insurers from forcing hospitals to charge more when working with rival insurance companies. The bill comes about a month after Michigan passed similar legislation, which resulted in the US Department of Justice motioning to dismiss an antitrust suit against health insurance giant Blue Cross Blue Shield of Michigan after the DOJ accused BCBS of stifling competition with the MFN clauses. Ohio also has a ban on MFN clauses.

Full Content: National Law Review

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