Highmark, others face suit over claims of antitrust violations

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Three southwestern Pennsylvania residents and two businesses Wednesday filed a lawsuit against Highmark Inc. and three other insurers, claiming they violated federal antitrust laws by agreeing not to compete against each other.

Valencia residents Kathryn Scheller and Michael Spreng, Mt. Lebanon resident Matthew Rutkowski and businesses Moss Architects and Iron Gate Technology claimed that Highmark and the other insurers "have explicitly agreed not to compete with one another" and "have attempted to entrench and perpetuate the dominant market position that each Blue Cross and Blue Shield entity has historically enjoyed in its specifically defined geographic market."

All of the plaintiffs are Highmark clients and they seek class-action status to represent other customers of the insurer.

Named as defendants in addition to Highmark are the Blue Cross and Blue Shield Association, Independence Blue Cross and the Hospital Service Association of Northeastern Pennsylvania, which does business as Blue Cross of Northeastern Pennsylvania.

Because of agreements with the Blue Cross Blue Shield Association and its fellow Blues insurers, Highmark does not compete for business in the Philadelphia region, home to Independence Blue Cross, or the northeast, where Blue Cross of Northeastern Pennsylvania operates.

But under its "shield" trademark, Highmark does compete for business in the midstate, with Harrisburg's Capital BlueCross.

The lawsuit in U.S. District Court claims Highmark has been able to inflate premiums because of what it calls "this illegal conspiracy" among Blues, which it claims violates the Sherman Act's antitrust provisions. According to the complaint, Highmark has covered 60 to 80 percent of Western Pennsylvania's health insurance market since 2000.

The complaint asks the court to award "damages in the form of three times the amount by which premiums charged by Highmark have been artificially inflated above their competitive levels," plus costs and attorney fees.

A Highmark spokesman had not seen the complaint and would not comment.

Some of the attorneys representing the plaintiffs are involved in a separate lawsuit against Highmark and UPMC alleging anti-competitive collusion between the two.

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Rich Lord: rlord@post-gazette.com, 412-263-1542 and on Twitter: @richelord. Bill Toland contributed.


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