UPMC files suit against Highmark claiming false advertising
August 5, 2013 8:22 PM
The Fifth Avenue Place headquarters of Highmark seen with the U.S. Steel Tower offices of UPMC in Downtown Pittsburgh.
By Bill Toland and Rich Lord Pittsburgh Post-Gazette
Even by the Hatfield-and-McCoy standards of their previous advertising campaigns, the most recent round of TV spots aired by Pittsburgh health care rivals UPMC and Highmark Inc. is particularly bruising, and political in nature.
The immediate fallout? Yet another false advertising lawsuit, filed Monday by UPMC against Highmark in U.S. District Court, alleging that the insurer's ad campaign accusing the hospital network of denying hundreds of thousands of people access to health care is a lie.
Last month, UPMC and Highmark began airing new, pointed ads. One of UPMC's ads was set in a diner, with two customers discussing the finer points of hospital-insurer contracting, and bemoaning that Highmark would be forced to steer customers to the "old" West Penn Allegheny Health System.
Another featured a woman on the telephone, talking to her insurer -- presumed to be Highmark -- and concerned that the insurer was trying to steer her away from UPMC and toward another hospital. A third carried the same theme, set in a workplace, with one actress suggesting that "I'm not having any of my babies anywhere but Magee."
Highmark also came up with its own diner ads, with one customer saying of UPMC that "they want a monopoly," as well as an advertisement that is reminiscent of campaign-season election ads, with a narrator, standing before blurry background visuals and speaking over ominous background music, saying that "UPMC [is] quite honestly trying to deceive you."
The Highmark ads come on the heels of another campaign, aired in April, in which Highmark -- at the time hoping to rally support for its acquisition of West Penn Allegheny Health System -- said that WPAHS "is fighting for its existence ... That means that this region could be at the mercy of what the Pittsburgh Post-Gazette calls a 'high-priced UPMC monopoly.' "
The ads have been blanketing the local airwaves, seen during the local news and Pittsburgh Pirates baseball games.
"In a word, 'Wow,' " said Rob Rosenberg, president of Springboard Brand & Creative Strategy, a health care ad and marketing firm in Arlington Heights, Ill. "I have not seen this crazy of an ad war before. ... It is like political advertising, and I'm sure a huge turnoff to consumers in the area."
In response to the legal complaint, Highmark spokesman Aaron Billger said: "No single health care organization should have the power to dictate where you can seek affordable medical care. The intent of our ads is to protect and inform the community ... The irony is that UPMC runs misleading ads and then takes legal action against Highmark Health Services to try to stop it from informing the public about the threat to the community's health care choice. We plan to aggressively defend UPMC's allegations about our ads."
In the Monday lawsuit, UPMC quotes Highmark's ads, which claim that UPMC "will 'deny access,' 'close its doors,' or otherwise not allow" many area people to use the dominant hospital system's facilities after 2014. UPMC called the claims "part of Highmark's larger campaign to take 41,000 inpatient admissions away from UPMC" and steer them to the new Allegheny Health Network, the name Highmark has given the former West Penn Allegheny system.
The lawsuit follows a back-and-forth volley of cease-and-desist letters from UPMC to Highmark, between the organizations' two legal heads, Thomas VanKirk (at Highmark) and W. Thomas McGough Jr. (UPMC). In one such letter, Mr. McGough groused that, in one of Highmark's diner ads, the diner customers appeared to be over the age of 65 -- giving the appearance that they might be talking about Medicare issues, when in fact Medicare beneficiaries using Highmark insurance products will still have access to UPMC.
According to UPMC's 31-page complaint, Highmark's ads are false because the insurer's customers still will have out-of-network access to the hospitals; because Children's Hospital and a handful of other facilities will still be in-network; because people can preserve in-network access by switching insurers; and because Medicare subscribers will not be affected.
UPMC asked the court to declare Highmark's ads to be in violation of the federal Lanham Act, order a stop to the campaign and award triple damages to the hospital system.
Last year, Highmark similarly sued UPMC alleging that its "Keep Your Doctor" advertising campaign violated the Lanham Act. Highmark withdrew that lawsuit in July 2012 as part of a deal extending in-network access for its customers to UPMC facilities through the end of 2014.
In 2001, Highmark filed a similar federal suit, claiming UPMC's insurance arm, UPMC Health Plan, lied about Highmark in its newspaper advertisements.
As for the most recent back-and-forth, Highmark and UPMC have gone toe-to-toe on the airwaves since the April WPAHS campaign. UPMC responded to that ad with its own ad buys in the last two weeks of June, buying $112,000 worth of television time across the city's network stations, according to reports filed with the Federal Communications Commission.
It has been on the air continuously since July 17, with airtime reservations made through Aug. 12. UPMC has a Republican political firm from eastern Ohio called Strategic Media Placement -- which worked locally with U.S. Rep. Keith Rothfus, R-Sewickley, in his campaign last year -- handling the advertisements (and, as noted by Pittsburgh City Paper, the UPMC diner ad was set in Tommy's Diner in Columbus, Ohio, rather than a Pittsburgh diner).
Highmark is using the local Republican firm Brabender Cox -- which has worked with Gov. Tom Corbett and former U.S. Sen. Rick Santorum, among others -- for its buys. After its initial campaign in April, it resumed advertising on July 27 and has reservations with the city's stations through Sunday.
Since April, Highmark and UPMC have spent about $375,000 each on Pittsburgh advertising time, but that only includes money spent at the network stations required to file online by the FCC, and not cable stations.
Mr. Rosenberg, the hospital ad expert, said the campaigns were "unbecoming of health care leaders in the region and unfortunately, the [Federal Trade Commission] does very little to monitor hospital advertising like it does other industries.
"Imagine if Coke and Pepsi had ad wars like this -- at least the FTC would come in and ask for substantiation [and] the stations would require some sort of similar compliance," he said.