Lifewatch AG entangles Blues insurers in lawsuit over heart-monitoring services

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Of all the antitrust complaints being dealt Highmark Inc.'s way, the most interesting might be the one filed by a Swiss telemedicine company that happens to be led at the board level, as of this week, by Highmark's former CEO.

LifeWatch AG has sued the Pittsburgh insurer and the rest of the Blue Cross Blue Shield Association-affiliated insurers because it claims they no longer fully cover the cost of the company's mobile cardiac outpatient telemetry service.

The complaint was originally filed in the U.S. District Court's Eastern District of Pennsylvania. Last month the case was steered to Alabama's Northern District and consolidated into the larger multidistrict litigation concerning licensing agreements between the Blue Cross Blue Shield Association and its member organizations.

In that sense, the case is just one of many antitrust complaints lodged against the Blues insurers each year, and because so many of them touch on the same facts, the Judicial Panel on Multi-District Litigation has determined the complaints will be consolidated and heard by U.S. District Court Judge R. David Proctor.

But this particular complaint also provides a window into what's at stake within the remote medical monitoring industry.

New wireless heart devices, sensors and ultrathin patches are being approved each year by the Food and Drug Administration, and companies on the ground floor have a chance to corner a segment of the emerging "mobile health" market.

"The potential seems very real," said Brian Dolan, health industry tech expert and publisher of MobiHealthNews. "If you're able to monitor a person with heart issues remotely, 24/7, [that leads to] earlier detection of issues and a better use of resources. You don't need to be in a hospital, which is very expensive, of course."

One German research firm predicts that global sales of "mobile health sensors" -- just a sliver of the larger mobile and telehealth market -- could hit $5.6 billion by 2017.

And the bulk of those sales will be in the U.S., where LifeWatch has set up a Chicago office. The Swiss company is seeking $60 million in damages because of "an alleged conspiracy among the Blue Cross Blue Shield Association," Highmark and 37 other Blues affiliates. That conspiracy, according to LifeWatch, means the company's cardiac monitoring service is, in many cases, being denied.

This Wednesday, Ken Melani, Highmark's CEO until he was fired in April 2012, becomes board chairman of LifeWatch. Dr. Melani joined the board in January, four months after LifeWatch initially filed its suit.

LifeWatch claims that the Blues' market dominance across the U.S. essentially leads to a monopolistic conspiracy, particularly when the plans act in lockstep.

"Were it not for this conspiracy, their greatest competition would come from other Blue Cross plans," the complaint says, suggesting each of those Blues insurers could decide on their own whether to reimburse for the LifeWatch services, which remotely detect cardiac arrhythmias and other possibly alarming heart issues.

Highmark deferred comment to the umbrella organization.

"We believe this litigation is without merit, and we will vigorously defend our system and the benefits it provides to customers," said Tilden Katz, spokesman for the Blue Cross Blue Shield Association. "The system has worked well for decades in keeping costs down, rewarding medical professionals for providing quality care, better managing the care of patients with chronic conditions and encouraging everyone to make healthier choices to prevent disease."

LifeWatch claims that, until March 2010, Highmark was paying for its services universally. But after that point, Highmark began adhering to the Blue Cross Blue Shield Association's stance that mobile cardiac outpatient telemetry, or MCOT, services "are not medically necessary," with regard to other states' Blues plans.

In other words, if a Pittsburgh patient with Highmark coverage was prescribed the monitoring, Highmark would pay for it. But if the patient's employer was based in another state or has primary coverage through another Blues plan, Highmark -- when processing those claims -- defers to the "control" plan's rules and denies coverage.

LifeWatch claims the result of the crazy-quilt of rules "is to deny most Blue Cross subscribers with heart problems the significant benefits of MCOT services, even though Highmark itself acknowledges those benefits."

What are the benefits? Primarily, real-time heart monitoring. LifeWatch's MCOT device, called LifeStar Ambulatory Cardiac Telemetry, constantly tracks and sends heart data to a monitoring center, where reviewers watch the data and alert medical professionals in the event of an abnormality or an arrhythmia.

The service, meant for stroke patients or others judged to need round-the-clock ECG monitoring, differs from other types of monitoring.

Some monitors are merely recorders, storing data internally for future review, but unable to transmit data wirelessly. Some -- called Holter monitors, after physicist Norman J. Holter, the inventor of remote cardiac monitoring -- are meant for short-term use, a day or two, which might not be a long enough observation window for those with infrequent heart episodes. And some monitors are activated only when a patient "feels something and can respond."

But the LifeWatch MCOT product can do all of the above -- remote monitoring over long durations, with data transmitted wirelessly, detecting arrhythmias and other clinical data without any or response required from the patient, for up to 30 days.

Several studies, including a large one conducted by the Department of Veterans Affairs, suggest mobile health could lead to big savings for the U.S. health system.

From 2003 to 2007, researchers tracked patients with congestive heart failure and chronic obstructive pulmonary disease, among other heart issues. Patients whose vital signs were monitored remotely, while at home, showed a 25 percent drop in their number of inpatient days and a 19 percent drop in hospital admissions.

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Bill Toland: or 412-263-2625.


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