Judge orders details released in Highmark, West Penn pact
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The purchase agreement between health insurer Highmark Inc. and the financially troubled West Penn Allegheny Health System ought to be released publicly, and nearly in its entirety, according to a Thursday ruling from a U.S. District Court judge.
Highmark released a redacted version of that affiliation agreement a week ago, but this week's ruling says most of the redactions are unnecessary, with some limited exceptions.
Previously, the agreement had been sealed with the permission of District Judge Arthur J. Schwab. The Post-Gazette intervened in the case with a motion to make the pact public on Nov. 21.
"Despite the numerous representations by West Penn Allegheny and Highmark that their 92-page affiliation agreement [and] the related 424 pages of schedules and exhibits [are] 'Privileged and Confidential,' [this] court's detailed examination of each of the 516 pages revealed that nearly all of said information already exists in the public domain," Judge Schwab wrote in his opinion.
As a result of the ruling, Highmark is required to release the full affiliation agreement, minus most of the redactions, by Thursday. Under past precedent, Highmark would have the ability to appeal this opinion, though an appeal does not necessarily equal a "stay," which would allow Highmark to postpone its compliance with the order.
In order to win a stay, Highmark would have to appeal the decision and demonstrate that it would be likely to prevail in that appeal.
A spokesman for Highmark had no immediate comment on the decision.
"Highmark is reviewing Judge Schwab's opinion in the context of the redacted affiliation agreement that was filed with the Pennsylvania Insurance Department last week and posted on Highmark's website," said Highmark spokesman Michael Weinstein.
"UPMC is very pleased with the court's ruling ... that will allow the public the ability to review all the details surrounding Highmark's acquisition of WPAHS," said UPMC spokesman Paul Wood.
Highmark officials could not be reached for comment.
The Post-Gazette's attorney in the intervention said the decision is good for the region's health care consumers.
"The court recognized the right of public access to an important document, affecting health care in Western Pennsylvania," said Frederick N. Frank of Frank, Gale, Bails, Murcko & Pocrass.
Highmark had argued that the agreement contains "confidential business information which [would] prejudice Highmark's business interests if released to UPMC or to other providers of health care services."
The affiliation agreement between Highmark and West Penn was filed with the federal court as part of an ongoing case involving Highmark, West Penn and the region's largest health care system, UPMC.
In 2009, WPAHS sued Highmark and UPMC in federal court, accusing the two of conspiring to stifle competition and starve WPAHS of patients and revenue.
While that lawsuit is still active, West Penn agreed, as part of the new partnership deal with Highmark, to drop Highmark from the lawsuit. UPMC has since argued that if Highmark is no longer a defendant, then no conspiracy between UPMC and Highmark could have existed, meaning the suit is now moot.
Judge Schwab is still considering that argument.
Highmark and WPAHS announced their proposed partnership June, and in November announced that it had cemented the deal, infusing the West Penn Allegheny system with $475 million in new capital and loans.
The redacted version of the agreement released last week laid out the loan repayment schedules, but omitted other details, such as the term sheet for the loans.
First Published December 30, 2011 12:00 am