Among the narrow class of people who keep an eye on these sorts of things, there's general agreement that Conemaugh Health System's high-stakes staring contest with insurance goliath Highmark Inc., which was suspended without a winner being declared, was a gutsy expression of dissatisfaction.

But was it smart? And will it win them any concessions from the Pittsburgh-based insurer, considering Conemaugh's absence of negotiating leverage?

Last week, as Johnstown-based Conemaugh and Highmark neared a June 30 deadline to strike a new reimbursement contract, the state Department of Insurance intervened, extending by up to six months the terms of the existing contract between the two institutions.

The authority to intervene may be exercised under only certain circumstances, and, "this, to my knowledge, is the first time these circumstances have presented themselves" in the last decade, said state Insurance Commissioner Joel Ario.

It's a unilateral authority, given to the Insurance Department by Act 94, and it hasn't been dusted more than two or three times in its 33-year existence. When Highmark and the University of Pittsburgh Medical Center were at the brink of a breakdown six years ago, the Insurance Department was ready to enforce the contract via Act 94, to ensure that Highmark's customers continued to have access to UPMC's system.

But a deal was struck just days before the deadline, and Act 94 (which applies to the market-dominant Blues, but not the for-profit insurers) remained on the shelf.

As Highmark was negotiating with Conemaugh this year, it was simultaneously discussing a new reimbursement schedule with West Penn Allegheny Health System -- that contract, like Conemaugh's, was set to expire June 30. But West Penn and Highmark signed a deal that day.

This time, though, Conemaugh took Highmark past the deadline. Highmark, armed with its 60 percent market penetration and the knowledge that Conemaugh can't survive without Blue Shield members, didn't blink. Nor, surprisingly, did Conemaugh, armed with little more than the belief that their hospitals are being underpaid.

"It's very unusual. I would think Conemaugh places themselves in serious jeopardy of losing a substantial portion of their business," said health care attorney Andy Thurman, who has done legal work for both Highmark and Conemaugh.

About 70,000 Conemaugh Health System users have individual or employer-paid Highmark plans, representing the bulk of Conemaugh's non-Medicare and Medicaid patients. Because Medicare reimbursement rates are set by the federal government without negotiations with individual hospitals, bartering with insurers is a hospital system's best bet for increasing revenue.

"Conemaugh is making a statement -- either to Highmark or the employers or both," he said, suggesting that this may be Coneamugh's way of saying that employers in the region need to pull more of the load.

But the employers in Cambria and Somerset counties would be burdened with higher rate increases if Highmark were to accept the terms of the most recent Conemaugh proposal, said Highmark's Aaron Billger.

"It's all about a delicate balance," he said, trying to be fair to both hospitals and employers, splitting costs between them.

Conemaugh wasn't impressed by Highmark's version of "balance," and when pressed to extend its operating arrangement with Highmark on its own volition, it declined, terminating the reimbursement contract, which set in motion the June 30 deadline. Had the Insurance Department not stepped in, over the next few weeks and months, Highmark-insured patients would have gradually lost access to Conemaugh's four hospitals and outpatient facilities, meaning they would have had to go elsewhere for care, or paid out-of-network rates.

The contract, which had been in place for years and amended occasionally, sets the rates that the hospitals are paid for every treatment, surgery or ER visit.

Conemaugh says Highmark is being stingy compared to what other insurers are paying for the same treatments.

"We want to have a contract that compares with what other payers already pay us and reflects a hospital of our size," said Amy Bradley, Conemaugh's marketing director. She said Highmark's reimbursement increases have averaged 3.65 percent over the last several years, well below the actual inflation of health care costs.

If the standoff drags on, the Insurance Department could hold public hearings and conduct its own investigations, a potentially costly process that could affect Conemaugh's pocketbook more than Highmark's, said Randy Rohrbaugh, the deputy insurance commissioner who has been monitoring the Highmark-Conemaugh case.

He, too, was surprised the showdown went as far as it did.

"They always seem to come together on the last day, at the last hour," he said.

Mr. Rohrbaugh also said if Conemaugh is playing a game of chicken in the name of making some kind of statement, "that's a dangerous strategy," given how many patients and policyholders are involved.

At least one lawmaker was sympathetic to Conemaugh's plight -- Indiana County Republican Sen. Don White, who heads the Senate's banking and insurance committee, which has been examining the impact of the proposed merger between Highmark and Philadelphia's Independence Blue Cross.

"Rural and independent hospitals are at a particular disadvantage in today's market, and the proposed merger will only exacerbate the problem," Mr. White said. "That is why I strongly believe there needs to be a mediation process established as a condition of the proposed merger so that if the merger is approved, providers have a fair opportunity to seek appropriate reimbursement."

If Conemaugh and Highmark were to reject the findings of the Insurance Department investigation (supposing it comes to pass), and Conemaugh decides not to extend the old Highmark contract, the two groups would part ways after the 180 days.

But both Highmark and Conemaugh say they hope to resume negotiations soon and avoid such a scenario.