Hurdle for Highmark
Judge advises against injunction over UPMC ads
Afederal magistrate judge recommended denying a preliminary injunction sought by insurer Highmark to squelch an advertising campaign launched by the University of Pittsburgh Medical Center in a contract fight between the two.
In her report filed in U.S. District Court in Pittsburgh, Magistrate Judge Cathy Bissoon suggested that Highmark is unlikely to win its case on the merits and failed to show that UPMC’s ads caused an immediate harm that requires the extreme remedy of a preliminary injunction.
UPMC quit negotiations to renew the contract after Highmark agreed in June to take over Pittsburgh’s struggling West Penn Allegheny Health System. UPMC and Highmark proceeded to battle over the proposal in court and at public hearings. Highmark filed suit in July asking the court to halt UPMC’s advertising regarding the end of its Highmark contract on June 30, 2012. UPMC filed a motion to dismiss the case in August; that motion is still pending, according to the magistrate’s report.
The dispute prompted Pennsylvania’s executive deputy insurance commissioner to chide both during a hearing in August. “While we generally do not comment on pending regulatory matters, I can say we have met with and urged both parties to stop the negative attacks that have resulted in nothing more than heightening fear and confusion for customers,” Randy Rohrbaugh said.
Highmark and UPMC have differing interpretations over what will happen when their 10-year contract runs out. Highmark contends that its members will be able to receive services from UPMC hospitals and physicians through June 30, 2013, under a one-year “run-out” provision in the contract. UPMC’s position, according to the magistrate’s report, is that Highmark members will require prior approval to use UPMC hospitals at in-network rates for the year ending June 30, 2013, and that, moreover, the contracts for UPMC physician services don’t have the run-out provision and are terminable 60 days after June 30, 2012.
Highmark noted in a statement that the report is preliminary and does not bind U.S. District Judge Joy Flowers Conti as she rules on what Highmark called “UPMC’s false advertising claim.” In its statement, UPMC contended that the recommendation “is a demonstration of Highmark’s failed attempt to use legal process to confuse the public, ultimately causing uncertainty and anxiety for patients, physicians, employers and subscribers.”
UPMC officials have said the health system has new contracts with insurers other than Highmark, which would become a rival through its investment in West Penn Allegheny.
Highmark agreed to invest $50 million in West Penn Allegheny and committed another $425 million to prop up the faltering system. Further terms of the deal, which must be reviewed by the state attorney general and Department of Insurance, have not been released.