Highmark used anti-competitive actions in 'precedential' case

Highmark illegally conspired to reduce competition, raise prices and gain a monopoly on the Pittsburgh region's healthcare industry, according to a newly reinstated antitrust lawsuit against the health insurer and the University of Pittsburgh Medical Center (UPMC).

A U.S. District Court previously dismissed West Penn Allegheny Health System's antitrust claim. But a U.S. 3rd Circuit Court of Appeals panel, acting on an appeal from West Penn Allegheny, found ample grounds to proceed with the claim, according to the Pittsburgh Tribune-Review. The appeals panel said the allegations "plausibly suggest ... anti-competitive conduct," reports the Lebanon Daily News.

Among the suit's claims, West Penn says UPMC refused to contract with other health insurance companies at reasonable rates and Highmark paid inflated reimbursements to UPMC's facilities, putting other insurers at an economic disadvantage.

According to the Pittsburgh Post-Gazette, the court acknowledged that UPMC and Highmark may have:

  • forged a deal to cancel Highmark's Community Blue product in return for UPMC undermining its own health insurance plan;
  • refused West Penn's request to refinance a 2000 loan from Highmark even as the insurer began lending UPMC money to build a new Children's Hospital;
  • arranged high insurance reimbursement rates for UPMC's services, and "artificially depressed" rates for West Penn's services; and
  • reaped record profits during the period, which only ended when the Department of Justice began investigating the relationship between Highmark and UPMC.

The court stamped the cover sheet of the decision "precedential," a move signaling the panel wants the ruling to be considered a guide for future antitrust cases. "This is a big decision," lawyer Joseph Friedman told the Pittsburgh BusinessTimes. "This stands for some important antitrust principles that the Third Circuit wants future courts to take into consideration."

The appeals court is now expected to send the case back to U.S. District Court, which could then call a conference of the parties to discuss how to proceed.

Highmark responded to the court's action, saying it will continue to "vigorously fight" the claims and believes "it will prevail on the merits."

To learn more:
- read the Pittsburgh Tribune-Review article
- read the Lebanon Daily News story
- see the Pittsburgh Post-Gazette article
- see the Pittsburgh Business Times piece

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