'Gorillas' UPMC, Highmark bump chests in court
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A hearing Friday on whether to dismiss UPMC's antitrust lawsuit against its health care rivals turned into a zoology debate.
UPMC and Highmark are "two big gorillas. One is in the forest in country A, and one is in the forest in country B," said U.S. District Judge Joy Flowers Conti. The fact that one is the alpha ape in the health services forest and the other is the insurance silverback "makes it difficult" to decide who harmed whom, and how much, she said.
At issue was the plausibility of UPMC's lawsuit claiming that Highmark conspired with West Penn Allegheny Health System to siphon off patients and depress 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, he said.
He said that back in 2002, when Highmark and UPMC last negotiated a contract, "AHERF was the 800-pound gorilla," referring to the Allegheny Health Education and Research Foundation.
AHERF filed for bankruptcy in 1998.
Attorney Margaret Zwisler, representing Highmark, called UPMC's claim "preposterous."
She said that 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. "Now we have competition in this market. That makes this claim impossible."
Litigation among the parties began in 2009 when West Penn Allegheny sued claiming that UPMC and Highmark stifled competition. It dropped Highmark as a defendant when it agreed to be purchased by the insurer.
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 UPMC's success undercuts its claims. "You've grown, you've gotten more market share, and you're saying you should've gotten more market share."
"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 suit.
First Published January 5, 2013 12:00 am