Pittsburgh health system targets competitor UPMC and insurer Highmark with antitrust lawsuit

Pittsburgh health systems in antitrust battle

PITTSBURGH — A hospital network is suing its much larger competitor, the University of Pittsburgh Medical Center, and the region’s dominant health insurer, claiming they are conspiring to put UPMC’s competitors out of business through an illegal monopoly.

West Penn Allegheny Health System Inc.’s suit accuses UPMC of refusing to contract with other health insurance companies at reasonable rates. In return, insurer Highmark Inc. pays inflated reimbursements to UPMC’s hospitals and less money to other networks, putting them at an economic disadvantage, the lawsuit claims.

The arrangement allows Highmark to corner the market on UPMC patients, West Penn Allegheny argues in its federal lawsuit, which was filed Tuesday in U.S. District Court in Pittsburgh. The region’s residents have suffered higher health care costs as a result, said David L. McClenahan, West Penn Allegheny’s chairman.

UPMC denied the allegations and called the suit an attempt to divert attention from West Penn Allegheny’s financial difficulties. UPMC is not to blame for West Penn’s troubles, UPMC spokesman Paul Wood said in a statement Wednesday.

West Penn Allegheny lost $63 million in the fiscal year that ended June 30. The hospital blamed the loss on a $73 million accounting error that overstated its net accounts receivable.

Highmark also said the lawsuit was an attempt to divert attention from West Penn Allegheny’s own problems. Highmark also said it has provided the hospital system with loans and grants of nearly $180 million, without which its hospitals might not have survived.

UMPC is the region’s largest employer, with about 50,000 workers. West Penn is the region’s second-largest health system and has just over 13,000 employees.

The lawsuit seeks unspecified damages and asks that a judge break up the alleged monopoly.

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