Judge stops settlement in Highmark case

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A judge Monday put the brakes on a proposed settlement between class action plaintiffs and Highmark, saying that she needed more detail about the benefits to insurance ratepayers.

Attorneys for the plaintiffs told U.S. District Judge Joy Flowers Conti that even after settling with Highmark, they would pursue damages against UPMC that could reach nine figures.

"One hundred million -- is that what you're thinking?" Judge Conti asked plaintiffs attorney Scott Hare.

"The damage calculus would easily be in the hundreds of millions of dollars," he replied, at a hearing on the motion for preliminary approval of the settlement.

Royal Mile Co., a Whitehall-based real estate firm, sued Highmark and UPMC in 2010, saying they conspired to boost medical care and health insurance costs. Royal Mile was later joined by Coles Wexford Hotel Inc. and individual ratepayer Pamela Lang, and they seek to represent all Highmark ratepayers.

The plaintiffs want to settle with Highmark only. The insurer would give the plaintiffs $4.5 million and a trove of documents to use against UPMC.

Highmark would pledge not to give some medical providers higher reimbursements than others through 2014, thus enhancing competition, Mr. Hare said.

Highmark would also continue to offer its low-cost Community Blue product. Mr. Hare said those pro-competitive pledges are worth tens of millions of dollars to ratepayers.

"I just have to have a little more than that," Judge Conti said. "I don't know that there's any real value here" for ratepayers.

Judge Conti said the plaintiffs and Highmark need to come up with a way to make sure that nearly all current and recent Highmark subscribers know how they can object to the settlement if they don't agree.

"Somehow you need to highlight that the lawyers are being paid," and that there's no guarantee that ratepayers will get money, Judge Conti told Mr. Hare.

The proposed $4.5 million payment by Highmark would cover expert costs and attorney fees, Mr. Hare said. Ratepayers could get cash if the plaintiffs prevail against, or settle with, UPMC.

Attorney Paul M. Pohl, representing UPMC, said the hospital system doesn't agree with the characterizations of potential damages and is seeking to have the case dismissed.

Judge Conti gave the plaintiffs until Jan. 11 to provide her with information she needs to decide whether to give the settlement preliminary approval.

She is handling two other lawsuits involving the region's feuding medical institutions. In one, West Penn Allegheny Health System is suing UPMC, claiming it unlawfully sought to stifle competition. In the other, UPMC sued Highmark, claiming the insurer used unlawful means to try to siphon business from the region's dominant hospital system.

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


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