Highmark has found a way to continue with its acquisition of West Penn Allegheny Health System while preventing the hospital from going into bankruptcy.
Pennsylvania's largest insurer said Wednesday that it reached an agreement outside of court with West Penn to pay off $635 million of its $710 total debt, helping the hospital system restructure and avert a bankruptcy filing, Pittsburgh Business Times reported.
"Throughout this process we all worked hard to develop a financial plan for the short and long-term financial stability of the health system," Highmark CEO William Winkenwerder said in a statement.
The agreement, which stipulates that Highmark will buy the debt for 87.5 cents on the dollar, will help the insurer move forward with its plan to create a regional integrated health system to compete with UPMC. If Highmark and West Penn hadn't reached a deal, the Pennsylvania insurance department might have opposed the merger, according to Bloomberg.
In an email to West Penn employees, WPAHS board chairman Jack Isherwood called the deal "a terrific step" but added that "further steps must be made before our affiliation with Highmark will be finalized," reported the Pittsburgh Post-Gazette.