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 today by a federal judge who wrote that she couldn't second-guess Pennsylvania regulators.
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.
U.S. District Judge Joy Flowers Conti noted that the Pennsylvania Insurance Department approved the allegedly excessive rates, and case law bars federal courts from taking issue with 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 factual basis for claims that UPMC had fraudulently concealed information during that time.
Judge Conti dismissed the claims without prejudice and gave the plaintiffs 30 days to file an amended complaint that wouldn't be barred by the state's approval of rates.
Attorneys for Royal Mile could not be immediately reached for comment.
Rich Lord: firstname.lastname@example.org or 412-263-1542. Twitter: @richelord.