Hur­dle for High­mark

Judge ad­vises against in­junc­tion over UPMC ads

Modern Healthcare - - REGIONAL NEWS - Vince Gal­loro and Melanie Evans

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.

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