Highmark: Conspiracy To Monopolize Health Care?

“Highmark Inc., conspired to monopolize the city’s health care market ……..raise prices at the expense of employers and consumers……………..Highmark is one of the nation’s largest independent licensees of the Blue Cross & Blue Shield Assn. ……………….”

October 7, 2011 – 1:13 pm ET

PITTSBURGH—A federal antitrust suit alleging that the University of Pittsburgh Medical Center and Pittsburgh’s dominant insurer, Highmark Inc., conspired to monopolize the city’s health care market will proceed in federal court as a result of U.S. Supreme Court declining to take the case.The suit was filed in April 2009 by West Penn Allegheny Health System, which alleged that UPMC and Highmark conspired to reduce competitionin the Pittsburgh health care market and raise prices at the expense of employers and consumers. The suit also alleges that UPMC and Highmark had been colluding to put West Penn Allegheny out of business since the summer of 2002.The case will return to U.S. District Court Judge Arthur Schwab, who had dismissed the case in October 2009. West Penn Allegheny appealed the decision, and the 3rd U.S. Circuit Court of Appeals reversed the ruling last year. In January, Highmark and UPMC filed separate appeals to the Supreme Court, which on Monday declined to hear both.UPMC ‘disappointed’

UPMC said in a statement that it is disappointed the high court would not review the case. A spokesman for West Penn Allegheny said the health system doesn’t comment on pending litigation.

A spokesman for Highmark said, “While we’re disappointed that the U.S. Supreme Court denied our petition, the case will now proceed in the district court.”

Meanwhile, Highmark announced in June that it plans to acquire West Penn Allegheny for $475 million. However, the deal is subject to federal and state regulatory review.

West Penn Allegheny lost $48.8 million from operations in the nine months ended March 31, according to its most recent financial statement. UPMC, by comparison, reported net income of $726.8 million for the year ended June 30.

Based in Pittsburgh, Highmark is one of the nation’s largest independent licensees of the Blue Cross & Blue Shield Assn. with 4.8 million members in Pennsylvania and West Virginia.

A copy of West Penn Allegheny’s appeal to the 3rd Circuit is available here.