Michigan’s largest health insurer, Blue Cross and Blue Shield of Michigan, was on Monday sued by the federal government after it forced at least 70 hospitals to charge its competitors higher rates.

The health insurance giant allegedly used its prominence in the market to force hospitals to raise prices of their competitors and prevent other insurers from competing with them.

The lawsuit filed in Detroit’s federal court alleges the company paid even more than proposed if a hospital agreed to charge other insurance companies, including Health Alliance Plan, Aetna and Humana, much higher prices.

“This lawsuit is without merit, and we will vigorously defend our ability to negotiate the deepest possible discounts for our members and customers with Michigan hospitals," said Andrew Hetzel, vice president of Blue Cross corporate communications in a statement.

According to Hetzel, the government was merely seeking “to deny millions of Michigan residents the lowest cost possible when they visit a hospital.”

Hetzel said the discounts are a vital part of Blue Cross' mission to provide Michigan residents with statewide access to health care at a reasonable cost.

"It is deeply disturbing that Blue Cross, a non-profit created to help Michigan citizens, would strong-arm hospitals at the expense of hard-working families,” said attorney general Mike Cox of health insurer’s practices.

"These greedy deals are hardly what the Legislature had in mind when it created Blue Cross."

Blue Cross covers more than 3 million residents in Michigan making it the largest health insurer in the state.