Highmark says UPMC misleading consumers

Health provider's feud reaches federal court

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The public slugfest between Highmark and the University of Pittsburgh Medical Center veered into federal court Wednesday, as the insurer accused the hospital system of misleading advertising "designed to panic employers and health care consumers."

In doing so, Highmark took UPMC down a road they traveled a decade ago, when a judge ordered the hospital system to run ads correcting earlier advertising. Highmark's contention that UPMC is misleading people may be tough to prove, though, experts said.

"You generally have to bring forward survey evidence that [at least 15 percent of] consumers see, or take away, a false message from the advertising," said Jerre Swann, a partner at the Atlanta law firm Kilpatrick Townsend and a specialist in false advertising. "Those surveys are expensive. They can sometimes be difficult to administer."

Highmark's point is subtle.

It claimed that UPMC's "Keep Your Doctor" campaign makes people think they'll lose in-network access to their physician imminently if they are insured by Highmark. Highmark's contract with eight UPMC hospitals is set to expire in mid-2012. At the same time, the insurer has announced an acquisition of UPMC competitor West Penn Allegheny Health System.

Highmark claimed in its complaint that its contracts with UPMC include a "run-out" clause that maintains the status quo through mid-2013.

Not so, UPMC's spokesman said.

"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," wrote Paul Wood, UPMC vice president of public relations. "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."

"Highmark will take every measure necessary to protect our members and to make sure that they can continue to receive uninterrupted care with UPMC physicians and at UPMC facilities through June 30, 2013," wrote the insurer's spokesman, Michael Weinstein.

Tom Tomczyk, principal and health expert with Buck Consultants' local office, said UPMC's campaign has been effective.

"What they have done has raised a lot of concerns" in the health marketplace. "I don't know what the truth is. ... We've interviewed [each] of their senior people, and they both tell very different stories."

Mr. Tomczyk withheld judgment on whether UPMC's campaign has been incorrect from a factual standpoint, or whether it has employed "scare tactics" as Highmark contends, but he said if Highmark believes that to be the case the company is right to make that case in court.

"They owe it to the public and owe it to themselves to get the truth out there," he said.

Highmark's complaint said UPMC's campaign has also had components that are outside of the public eye, which violate contracts.

The complaint said UPMC Senior Vice President Gregory K. Peaslee has stoked fear in letters to employers saying they should be "preparing now" for a Highmark-UPMC split. UPMC hospital executives, it continued, have been telling staff to distribute "Keep Your Doctor" materials to Highmark members.

It said that violates contractual pledges by the hospitals not to interfere with the insurer's relationships with its customers.

The complaint said 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 health care provider to UPMC to allow Western Pennsylvania consumers a choice of providers as well as access to additional providers."

In 2001, Highmark filed a federal suit similar to the one lodged Wednesday, claiming UPMC's insurance arm, UPMC Health Plan, lied about Highmark in its newspaper advertisements.

In a ruling that was later upheld by the 3rd U.S. Circuit Court of Appeals, U.S. District Judge William Standish said in February 2001 that Highmark deserved injunctive relief to stop UPMC from distributing "false and deceptive" materials about Highmark.

In granting the injunction, Judge Standish had ruled that UPMC must publish at least two full-page ads explaining that an ad it ran in the paper earlier that year contained misleading information.

Another possible motive for the lawsuit: It gets Highmark's position into the media.

"Even if the lawsuit fails, it gets the plaintiff's point across," Duquesne University law professor Bruce Ledewitz said. "That's an effective strategy."

Jim McTiernan, Triad USA principal and former Highmark executive, said he, too, suspects the suit was as much about perception as winning relief in court.

"I would think that it's more to let the public know that this is not over and Highmark is not going away," he said.


Rich Lord: rlord@post-gazette.com or 412-263-1542. Bill Toland: btoland@post-gazette.com or 412-263-2625.


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