Highmark: State agency's plans 'illegal'
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In its lawsuit against the state Department of Insurance, Highmark Inc. says the department, as part of its wide-ranging examination of the state's insurance marketplace, is "planning to release imminently documents based on the wrongful use of Highmark's confidential information."
The suit also alleges that, in the last two weeks, it has become apparent that the Insurance Department plans to "interfere" with Highmark's exclusive Blue Cross-Blue Shield service rights to Western Pennsylvania. The department, the suit contends, plans to publish reports to that effect "without any jurisdiction" under the Unfair Insurance Practices Act.
"It's illegal," Highmark CEO Dr. Kenneth Melani said in an interview Wednesday.
"During the merger [process], we produced a lot of very sensitive, confidential information," which shouldn't be passed on to third-party auditors, he said.
Last July, the Insurance Department announced it would be investigating the state's health insurance landscape; in particular, the activities of the state's four Blue Cross-Blue Shield insurers -- Highmark, Philadelphia's Independence Blue Cross, Blue Cross of Northeastern Pennsylvania and Harrisburg's Capital BlueCross -- to determine if the Blues "use their market power to unfair and anti-competitive advantage."
In so doing, the department announced that it would be hiring two independent auditors to lead the review. Those two auditors -- LECG LLC and the law firm of Hangley Aronchick Segal & Pudlin -- were the same consultants that investigated the proposed merger between Highmark and IBC.
Partly on the basis of the reports generated by the two third-party investigators, the merger was ultimately panned by the Insurance Department in 2009. The fact that the same auditors are being used again by the department "creates a stacked deck against Highmark in any examination," the lawsuit said.
First Published March 18, 2010 12:00 am
