West Penn says Highmark agreement should remain secret

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The region's biggest healthcare players today formally staked out positions in a court dispute over the confidentiality of the new affiliation agreement between West Penn Allegheny Health System and Highmark.

Their briefs in U.S. District Court came in response to a Pittsburgh Post-Gazette motion to have the affiliation agreement made available to the public. It is currently filed in court but sealed from the eyes of all but a handful of attorneys and experts involved in a two-year-old lawsuit in which West Penn accuses UPMC of pursuing a local healthcare monopoly.

The affiliation agreement defines the terms of the partnership agreement between Highmark, the region's dominant insurer, and West Penn, the area's second largest hospital system. Highmark is infusing hundreds of millions of dollars into struggling West Penn.

The dispute is part of a lawsuit West Penn originally filed against Highmark and UPMC in which it accused them on conspiring to put West Penn out of business. Highmark has since become a business partner with West Penn and has been dropped from the suit.

Highmark in its brief said the agreement contains "confidential business information which ... would prejudice Highmark's business interests if released to UPMC or to other providers of healthcare services." It said parts of the agreement outline future business plans of Highmark and West Penn; the terms of funding commitments between the two; details about other litigation involving one or both of them; and fax numbers that aren't meant to be publicly available.

It also said parts of the agreement describe "conduct and strategy to secure [state] approval of the transaction" between Highmark and West Penn.

The insurer offered to provide a version of the agreement that redacted that information, which could then be publicly available.

UPMC countered in a brief also filed today that there is "no authority to justify [West Penn's] attempt, which Highmark has now joined, to shield virtually all [of the affiliation agreement] from disclosure." UPMC's outside attorneys, who have seen the agreement, wrote that "only snippets of information" from the agreements "should arguably remain under seal."

UPMC's outside counsel wrote that openness is the norm in federal court procedures, and noted that Highmark CEO Kenneth Melani has made public statements about the agreement.

"Neither Highmark, nor West Penn should be permitted to disclose such purportedly confidential information when it serves their interest, but maintain a death grip on it when disclosure might disadvantage their litigation interests," UPMC's outside counsel wrote.

UPMC's brief argued that there is no legal reason to keep salaries and contract information confidential for West Penn's doctors and other employees.

West Penn previously filed a brief saying the affiliation agreement isn't relevant to its contention that UPMC conspired to stifle healthcare competition, and agreeing with Highmark that disclosure "would result in direct and substantial injury."

U.S. District Judge Arthur J. Schwab, however, ordered it filed under seal, with only outside counsel for UPMC and experts retained for the case permitted to view it.

The Post-Gazette filed a motion Nov. 21 arguing that the agreement should be public because, in part, "Few issues could be of greater importance to the public than the general public's access to healthcare in the Western Pennsylvania region." If West Penn is arguing that UPMC has tried to eliminate it as a competitor, and if the agreement is a response to that, then it should be public, the newspaper argued.

A hearing on the motion to unseal the agreement is set for Jan. 17.

Rich Lord: rlord@post-gazette.com or 412-263-1542.


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