PITTSBURGH, May 23, 2012 — UPMC today released the following statement about its legally required response to the antitrust litigation filed by West Penn Allegheny Health System (WPAHS):

On May 2, 2012, Highmark and UPMC agreed that, upon approval of Highmark’s acquisition of WPAHS, Highmark would dismiss WPAHS’s antitrust case against UPMC and that UPMC would waive or dismiss any responsive antitrust claims against Highmark and WPAHS. Last week, UPMC asked the court to stay WPAHS's case pending a decision by regulators as to whether Highmark would be permitted to acquire WPAHS. WPAHS, however, opposed that request.

UPMC is disappointed with WPAHS’s desire to litigate the meritless antitrust lawsuit it initiated in 2009 while its acquisition by Highmark is pending Pennsylvania Insurance Department approval. Unfortunately, since WPAHS is intent on pursuing the case and in accordance with deadlines set by the court, UPMC had no choice but to file today’s claims in federal district court in Pittsburgh against WPAHS and its longtime benefactor and co-conspirator, Highmark.

UPMC’s claims show how Highmark has illegally dominated the health insurance market in western Pennsylvania for the last 15 years to the detriment of the region’s employers, hospitals, doctors and Highmark’s own subscribers, whose premium payments helped Highmark amass over $5 billion in reserves. These claims also show that ever since Highmark created WPAHS from the ashes of the AHERF bankruptcy, WPAHS’s purpose has not been to serve as a meaningful competitor in the provider market, but rather to serve as a complicit tool in Highmark’s scheme to dominate the regional health insurance market.

As detailed in UPMC’s claims, WPAHS has secretly and artificially been propped up by Highmark as a vehicle to help Highmark protect itself from insurance competition and maintain its health insurance monopoly. Despite WPAHS’s mismanagement and inefficiency, Highmark has kept it barely afloat to siphon patients away from UPMC and thereby hamper UPMC’s ability to emerge through its Health Plan as a competitor in the insurance market.

WPAHS has been used by Highmark to prevent the entry and expansion of other national insurers in the market and to impair UPMC Health Plan’s viability as a potential insurance competitor. Highmark’s actions, along with WPAHS’s collusion, have cost the citizens of western Pennsylvania billions of dollars over the past several years – dollars that Highmark has used to enrich its bloated reserves or funnel into a failing WPAHS.

UPMC’s claims also illustrate that:

• Aided by its collusion with WPAHS, Highmark seeks to force UPMC into a long-term contract beyond 2014 solely to preserve its health insurance monopoly, thereby allowing it to charge businesses ever-increasing and exorbitant premiums;
• Highmark has systematically discriminated against UPMC and in favor of WPAHS by, for example, threatening to steer patients towards WPAHS and away from UPMC and providing grants and reimbursement increases to WPAHS that were not made available to UPMC, hindering UPMC’s ability to compete against Highmark with its Health Plan; and
• Highmark has retained consultants in furtherance of a strategy to intimidate independent hospitals and physicians into curtailing their business with UPMC and shifting their business to WPAHS or other Highmark affiliates, including threats to build competing medical malls to prevent local hospitals from engaging in mutually beneficial business relationships with UPMC.

Read the complete text of UPMC's Claim Against Highmark.