Special master recommends unsealing Highmark, UPMC court records
Lawsuit: Health giants conspired to limit competition, keep premiums high
A special court master is recommending that hundreds of pages of sealed documents — including parts of U. S. Department of Justice depositions of former Highmark CEO Ken Melani and UPMC CEO Jeffrey Romoff — be opened to the public.
The documents were filed under seal in a six- count antitrust lawsuit that began 10 years ago in the U. S. District Court for the Western District of Pennsylvania on behalf of Highmark health insurance ratepayers.
The lawsuit alleges that between 2002 and 2012, Pittsburgh health giants Highmark and UPMC colluded to limit competition in the Western Pennsylvania market by favoring UPMC hospitals with higher payments for medical services than other hospitals were paid and by freezing competing health insurers out of the market so Highmark could keep premiums high.
All this happened at the expense of consumers, according to the lawsuit filed in 2009 by the former West Penn Allegheny Health System and Cole’s Wexford Hotel in Pine Township.
In the intervening years, Western Pennsylvania’s health care market devolved into a bitter rivalry between Highmark and UPMC, which began around 2011 with a dispute over the rates Highmark paid to UPMC for providing medical care to Highmark members.
At the time, UPMC argued that it was being shortchanged by Highmark. Then in 2013, Highmark acquired the West Penn Allegheny health care system, causing a final split with UPMC.
Before those developments, the lawsuit claimed a “sustained and orchestrated anti- competitive conspiracy” existed that resulted in higher health insurance premiums for consumers than otherwise would have been charged.
West Penn Allegheny dropped out of the litigation after Highmark acquired it in 2013. Two years later, UPMC settled its share of claims for $ 12.5 million, leaving Highmark as the only defendant.
The court master’s latest recommendations came July 26 — just weeks after a new 10- year medical services provider agreement between Highmark and UPMC went into effect. Like the first agreement, the terms of the new contract are proprietary and not subject to outside review.
The sealed court documents were part of a motion to certify a class of plaintiffs, representing 10,000 small group health plan subscribers in the region. A ruling has not been rendered on the request, an issue that can delay litigation.
Damages have the potential to reach $ 100 million, according to court records.
At the request of U. S. District Court Chief Judge Joy Flowers Conti, special court master Richard A. Levie has been sifting through hundreds of pages of documents, consultant reports, executive emails, PowerPoint slides and other materials filed in the case to decide what should be publicly disclosed.
When he is done — and a completion date hasn’t been set — his recommendations will be submitted to Judge Conti for review.
Highmark and UPMC will have an opportunity to appeal the judge’s ruling.
At the core of the special master’s review is the 2002 HighmarkUPMC agreement.
Details of the agreement have never been disclosed, but the special court master is recommending that parts of the 10- page agreement be released.
Over the years, as relations between Highmark and UPMC soured, UPMC began reaching agreements with commercial insurers — some of which had not been in the Pittsburgh market for 10 years. Aetna, for example, contracted for open access to UPMC’s hospital network in 2011.
“It appears that the longterm contract between Highmark and UPMC did diminish the incentives of each to compete and expand competition in these highly concentrated health insurance markets,” the Department of Justice said in a 2012 statement closing its investigation of Highmark’s acquisition of the West Penn Allegheny Health System.
The nature of testimony in 2009 by Dr. Melani and Mr. Romoff in the Justice Department depositions is not clear from court records, but the Cole’s lawsuit alleges the department began an antitrust probe of Highmark- UPMC business relations in 2007.
The Cole’s lawsuit, which was filed two years after the start of the Justice Department probe, was coincidental to the government investigation.
Highmark and UPMC in recent months have asked the court to keep parts of Mr. Romoff’s testimony sealed, with Highmark arguing in court filings that disclosure of “contractual terms could likely harm Highmark’s competitive standing.”
Mr. Levie recommended that much of the deposition testimony be unsealed.
“Having read the text Highmark highlighted for sealing, the special master finds it does not reveal any specific deal points; rather it characterizes the market power Highmark had,” Mr. Levie wrote. “Although Highmark may find these characterizations embarrassing, embarrassment is not grounds to seal.”