Highmark Inc. sued the University of Pittsburgh Medical Center in U.S. District Court today, accusing the health system of violating federal law by "misleading" the public through its "Keep Your Doctor" advertising campaign.
The dominant insurer and health system have been sparring for months since negotiations on a new reimbursement agreement broke down, and Highmark announced a massive investment in hospital competitor West Penn Allegheny Health System.
According to Highmark's complaint, UPMC seeks "to panic employers and health care consumers into thinking that they have to sever all ties with Highmark immediately" to preserve access to their doctors. Highmark said in the complaint that its customers would see no change in their access to UPMC doctors "until July 1, 2013, and therefore no employer or health care consumer need make any decisions regarding the potential impact of those changes for at least another year."
Highmark claims that even if the two do not renew contracts between the insurer and the bulk of UPMC's hospitals, a "run-out" clause will keep the terms in place until mid-2013.
UPMC Vice President of Public Relations Paul Wood disputed that contention in an email response to the lawsuit.
"Highmark's lawsuit, while meritless, drives home the point that its current contracts with UPMC will expire on June 30, 2012, and that there will not be a new contract," Mr. Wood wrote. "As for Highmark's interpretation of contractual provisions governing the run-out period, UPMC strongly disagrees and looks forward to presenting the court and the public with the actual contract language. We do regret, however, Highmark's unwillingness to accept our repeated invitations to discuss how to best unwind our relationship in a manner that minimizes disruption and concern. Perhaps this lawsuit will bring them to that table."
UPMC has spread its message through the website www.keepyourdoc.com, newspaper ads, radio advertisements, and "directives issued to the medical staff ... to distribute targeted solicitations to Highmark plan members," the complaint said.
It said the campaign violates the federal Lanham Act, which, among other things, bars false advertising.
The complaint said that UPMC and Highmark have long done business together, but that the hospital system now wants to punish the insurer "for having the temerity to help preserve West Penn (which employs more than 13,000 people) as an alternative healthcare provider to UPMC to allow Western Pennsylvania consumers a choice of providers as well as access to additional providers."
This is not their first row in court.
Ten years ago, the insurer sued UPMC on antitrust grounds to block the hospital system's impending affiliation with the then-independent Children's Hospital. The lawsuit was dropped in October 2001 after Highmark, UPMC and the state attorney general's office worked out a 20-year contract between Children's and Highmark.
Also in 2001, Highmark filed a federal suit similar to the one lodged today, claiming UPMC's insurance arm, UPMC Health Plan, lied in its newspaper advertisements about Highmark.
In a ruling that was later upheld by the 3rd U.S. Circuit Court of Appeals, U.S. District Judge William Standish ruled in February 2001 that Highmark deserved injunctive relief to stop UPMC from distributing "false and deceptive" advertisements and promotional materials about Highmark.
In granting the injunction, Judge Standish had ruled that UPMC must publish at least two full-page ads in the Post-Gazette explaining that an ad which ran in the paper earlier that year contained misleading information.
The ad read, in part: "If you were diagnosed with a serious illness tomorrow, which health plan would you rather have?"