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Key developments for Blue Cross Blue Shield of Michigan, Inc.
Michigan State Court Jury Orders Blue Cross Blue Shield of Michigan to Pay $4.5 Million to an Outpatient Physical Therapy Company
A Michigan state court jury found that Blue Cross Blue Shield of Michigan, Inc. must pay $4.5 million to an outpatient physical therapy company that alleged the state's largest health insurer tried to run it out of business.
An Oakland County Circuit Court jury found the Michigan Blues breached its contract with TheraMatrix Physical Therapy because of a program TheraMatrix had with Ford Motor Co., and the Blues interfered with its business relationship with Chrysler Motor Co. TheraMatrix sued the company in 2008 for breach of contract and interference in its contractual relationship in physical therapy services provided to Ford workers and a similar contract it sought with Chrysler. The company said that "it isn't a reflection of the facts of the case." "This was simply a business dispute" and was not a conspiracy or any of the other allegations TheraMatrix made. The company is reviewing for grounds for appeal.
The jury acknowledged the company used anti-compe ive practices and the trial proved that when it presented the program to save millions at Ford, Blue Cross Blue Shield breached the contract and then tried to put it out of business to avoid further compe ion. Blue Cross Blue Shield terminated TheraMatrix as a participating provider for its health plans in Michigan and then sent letters to insurance agents, doctors and companies saying TheraMatrix was no longer a provider but didn't tell them why.
The court decision doesn't affect the company's physical therapy network as this was one physical therapy provider. The jury awarded TheraMatrix $4.1 million on the breach of contract claim and about $450,000 for the tortuous interference claim. Blue Cross Blue Shield said the original claims TheraMatrix filed sought more than $35 million in damages and included several other assertions.
The other claims were dismissed before the case reached trial.
