Highmark-West Penn merger sets precedent for payer-provider deals

The U.S. Department of Justice's recent approval of the affiliation agreement between Pennsylvania's Highmark and West Penn Allegheny Health System--a takeover of WPAHS by the insurer--should provide guidance for future payer-provider relationships requiring federal support. DoJ last month concluded the "affiliation agreement likely will not reduce competition in the markets for hospital, physician or health insurance services," according to a column written by Christi Braun and Farrah Short, who practice out of the Washington, D.C., office of Mintz Levin. The anti-trust agency cleared the merger because the hospital market in the region is highly concentrated. It's also not likely that Highmark can partner and vertically integrate with another hospital system or that West Penn will enter or expand with another insurer in the region, the attorneys said.

However, any payers and providers considering future affiliations would be wise to review the scenarios DoJ noted, as those parties may face challenges to what might appear to be an anticompetitive takeover. --Read the full article on FierceHealthPayer