Highmark's purchase of West Penn Alleghany Health System (WPAHS) is a "tool" that allows the insurer to further its illegal domination of the Western Pennsylvania market, UPMC alleged in a lawsuit filed Thursday in U.S. District Court.
UPMC claimed that the WPAHS buyout serves as a "complicit tool in Highmark's scheme to dominate the regional health insurance market" rather than helping WPAHS "serve as a meaningful competitor in the provider market," the Pittsburgh Post-Gazette reported.
The UPMC lawsuit is a response to WPAHS's 2009 antitrust lawsuit that claimed UPMC and Highmark conspired to push it out of the healthcare market.
Highmark, which UPMC says already controls more than 65 percent of the commercial insurance market, has kept WPAHS "barely afloat to siphon patients away from UPMC and thereby hamper UPMC's ability to emerge through its health plan as a competitor in the insurance market," the health system added.
Further, Highmark's practice of reimbursing hospitals below market for services forces them to make up the difference by raising prices for other insurers, which effectively forces other insurers out of the regional insurance market, reported the Pittsburgh Business Times.
"A prime objective of the conspiracy has been for Highmark to utilize WPAHS for the purpose of blocking outside insurance entry," UPMC said in the lawsuit. "Highmark has engaged in a course of conduct that has improperly acquired and maintained its monopoly power in the relevant insurance markets."
Both Highmark and UPMC have become targets of state lawmakers concerned about potential antitrust actions. A state legislative panel will hold hearings this summer to explore how UPMC's and Highmark's regional dominance affects community hospitals, including whether they may "squeeze out" such hospitals in the region, according to the Pittsburgh Tribune-Review.