New data threaten deal with Highmark

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A proposed settlement between ratepayers and Highmark, which would have set the stage for further litigation against UPMC, appeared to be in critical condition Friday as the plaintiffs motioned to cancel it, claiming they were misled.

Attorneys for Royal Mile Co., Cole's Wexford Hotel and Pamela Lang -- who in 2010 sued the region's biggest hospital system and biggest insurer, alleging price gouging -- had been poised to settle with Highmark. The insurer had pledged $4.5 million to cover the plaintiffs' legal costs, a trove of documents they could use against UPMC, and two measures portrayed as spurs to competition.

Those measures: Highmark would not give some medical providers higher reimbursements than others through 2014; and Highmark would guarantee to continue to offer its low-cost Community Blue product.

The plaintiffs' attorneys had argued that the measures amounted to tens of millions of dollars in savings to ratepayers. The proposal was to be the subject of a hearing Friday before U.S. District Judge Joy Flowers Conti.

But on Thursday, UPMC filed a series of sealed documents. According to the plaintiffs' motion, those documents showed that Highmark "was already bound to reintroduce the Community Blue insurance product prior to the execution of the [settlement agreement], contrary to Highmark's express warranty."

In an emailed statement, one of the plaintiffs' attorneys, Benjamin J. Sweet, wrote: "It appears that the covenants regarding the reintroduction of Community Blue that we believed Highmark exchanged for a release of the Class's claims were entirely illusory and in direct contravention of Highmark's representation that the terms of the settlement are 'new undertakings and not otherwise binding upon it as pre-existing obligations.' "

Highmark spokesman Aaron Billger called the plaintiffs' interpretation of the agreement's validity "flawed and inaccurate."

"We stand behind our offer," he said, adding that the insurer's attorneys would file a detailed response in court by Jan. 28.

That's the deadline set by Judge Conti for any motion opposing the withdrawal of the settlement. She cancelled Friday's hearing.

The plaintiffs' attorneys have said they could show that UPMC inflicted nine-figure damages on the region's ratepayers.

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


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