Highmark seeks dismissal of UPMC federal antitrust lawsuit
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Highmark Inc. sought the dismissal today of an antitrust lawsuit regional healthcare giant UPMC antitrust lawsuit filed against the insurer.
U.S. District Judge Joy Flowers Conti called them "two big gorillas. One is in the forest in country A, and one is in the forest in country B."
If each dominates a separate but adjacent forest, can they be said to have harmed each other?
At issue was the plausibility of UPMC's claim that Highmark conspired with West Penn Allegheny Health System to siphon off patients and reduce payments for medical services.
"UPMC has suffered depressed reimbursement rates due to a lack of insurance competition," said Leon DeJulius, an attorney for the hospital system.
Highmark sought to keep UPMC "always under its thumb" by forcing it to accept low payments for services to patients, he said.
In 2002, when Highmark and UPMC last negotiated a reimbursement contract, "AHERF was the 800 pound gorilla," he said, referring to the since-bankrupted Allegheny Health Education and Research Foundation.
Representing Highmark, attorney Margaret Zwisler called UPMC's claim "preposterous."
In 2010, after Highmark's proposed purchase of West Penn Allegheny became known, UPMC "snapped its fingers" and competing insurers rushed into the region's insurance market, she said.
"Now we have competition in this market," she said. "That makes this claim impossible."
Litigation between the parties began in 2009 when West Penn Allegheny sued claiming UPMC and Highmark stifled competition. WPAHS dropped Highmark as a defendant when it agreed to the insurer's purchase offer.
In 2010 Royal Mile Co. sued UPMC and Highmark saying they conspired to increase premiums. Last year UPMC sued Highmark saying it joined with West Penn Allegheny to siphon off customers and stifle the growth of UPMC Health Plan.
Judge Conti asked whether a dominant player in a market, as UPMC is, can really claim that it was harmed by weaker rival West Penn Allegheny.
"You've grown, you've gotten more market share, and you're saying you should've gotten more market share," she said.
"The fact that UPMC did well doesn't immunize Highmark from antitrust violations," Mr. DeJulius said.
The judge ordered a transcript of the hearing to aid in deciding whether to dismiss UPMC's lawsuit.
First Published January 4, 2013 1:10 pm