NC House OKs barring health contract restraints

RALEIGH, N.C. (AP) — A bill designed to prevent Blue Cross and Blue Shield of North Carolina from requiring contract provisions which critics say discourage competition and raise health care costs has sailed through the House.

The chamber voted 102-10 on Thursday in favor of legislation that eliminates the use of what’s termed “most favored nation” clauses in agreements between insurers and medical providers. These contract provisions require doctors and hospitals to give an insurer whatever rates the insurer’s rivals are getting.

The bill applies to all carriers but targets Blue Cross, which insures 3.7 million people. A Blue Cross official says the company doesn’t enforce such clauses now but it’s premature to prohibit them given health care changes nationally.

The measure now goes to the Senate, which approved a similar bill in 2011.