A would-be class action lawsuit alleging that the Pittsburgh region's largest insurer and hospital system engaged in rate gouging from 2002 through 2008 was dismissed Friday by a federal judge who wrote that she wouldn't second-guess Pennsylvania regulators.
The plaintiffs' attorneys, though, are considering filing an amended complaint.
Royal Mile Co. sued UPMC and Highmark in 2010 and was later joined by several other plaintiffs who claimed they paid higher-than-market rates because of collusion between the two giants. The plaintiffs' attorneys had estimated in court that their damages claim, based on the total by which rates rose due to the alleged conspiracy between monopolies, could have exceeded $100 million.
U.S. District Judge Joy Flowers Conti noted that the Pennsylvania Insurance Department had approved the allegedly excessive rates, and higher court rulings bar federal judges from reviewing such approvals. She wrote that she "must defer to the institutional competence of the PID, which determined the rates charged by Highmark were not excessive, inadequate or unfairly discriminatory."
She also found that there was no basis for claims that UPMC had interfered with the market by trying to destroy West Penn Allegheny Health System, and that some claims against the health giant were barred by the statute of limitations.
She dismissed the claims but also gave the plaintiffs 30 days to file an amended complaint if they think they can craft one that wouldn't be barred by legal doctrines.
"We are working our way through the court's opinion, and it's clearly a very careful and very considered opinion," said Scott Hare, one of the attorneys for Royal Mile. He said he was "encouraged" by the judge's recognition that there are circumstances in which state-approved rates can be questioned in court, and that she left the door open for an amended complaint.
Rich Lord: firstname.lastname@example.org, 412-263-1542 or Twitter @richelord.