Firm sues Highmark, UPMC; claims insurance premium conspiracy

Revived West Penn suit prompted filing

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A Whitehall-based real estate firm filed a federal lawsuit Thursday charging that a conspiracy between Highmark Inc. and the University of Pittsburgh Medical Center raised its insurance premiums.

The complaint seeks class action status and comes three days after an appeals court resuscitated an existing lawsuit claiming anti-competitive activity by the region's leading insurer and dominant hospital system.

Royal Mile Co., in its complaint, contends that UPMC refused to contract with major, national health insurance companies or otherwise helped to marginalize their participation in the local market. It charges that Highmark, "in exchange," eliminated a low-cost insurance product that had resulted in business for rival hospital system West Penn Allegheny Health System and paid West Penn less for services than it paid UPMC.

The result, according to the lawsuit, is "artificially inflated premium costs." It says "hundreds of thousands" parties are affected.

Many of its claims echo those West Penn made in a court complaint that was dismissed last year. On Monday, the Third Circuit Court of Appeals reversed U.S. District Judge Arthur J. Schwab's dismissal of that case, sending it back to him for fuller consideration.

Andrew Stone, one of the attorneys for Royal Mile, said the appeals court's findings regarding the local healthcare and insurance markets helped to spur the filing.

A UPMC spokesman said the lawsuit "does nothing more than piggyback on West Penn Allegheny's earlier lawsuit, which is without any legal or factual basis. Nothing has been presented to support the allegations or to suggest anything other than lawful, unilateral, pro-competitive conduct by UPMC."

Highmark had not seen the lawsuit and declined comment.

Royal Mile is owned by the family that built Caste Village, according to its website. Mr. Stone said it employs about 30 people.


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


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