Oct 24, 2013 3 min read

PITTSBURGH – Attorneys for the University of Pittsburgh Medical Center and health insurer Highmark Inc. have agreed to end their dueling antitrust lawsuits at the urging of a federal judge.

But interested observers contend the settlement doesn’t resolve an ongoing dispute over a contract set to expire next year that would make most of UPMC’s doctors and hospitals out-of-network providers for Highmark customers. That means it would cost Highmark customers more to use UPMC services.

UPMC is Western Pennsylvania’s dominant hospital system, with more than 20 hospitals and 3,200 physicians. It also has a health insurance plan that competes with Highmark, the region’s largest insurer, which has millions of customers.

The antitrust settlement will probably do little to keep down prices for Highmark customers because of the ongoing contract dispute, said Jim McTiernan, a vice president with Triad USA, a company that helps employers manage health benefits.

State Rep. Dan Frankel, D-Allegheny, has sponsored legislation that would require all hospitals to accept all insurance coverage in an effort to end the UPMC-Highmark infighting.

The antitrust settlement “may resolve these two lawsuits and get them off the docket, but I don’t know that there is any other benefit to the community,” Frankel said.

UPMC has refused to extend an agreement to keep its hospitals and doctors in Highmark’s provider network, in part, because Highmark has built its own hospital network to compete with UPMC. The smaller Allegheny Health Network controls seven Western Pennsylvania hospitals, including the five-hospital West Penn Allegheny Health System and Canonsburg Hospital.

Ironically, the antitrust litigation began in 2009 when the financially strapped West Penn system sued Highmark and UPMC, claiming the health care titans were teaming up to control the market by charging excessive premium rates and offering excessive reimbursements not offered to other hospitals.

West Penn dropped Highmark from the lawsuit after the insurer rescued the hospital network with a buyout, only to have UPMC countersue Highmark and refuse to extend the contract to keep UPMC hospitals and doctors as in-network Highmark providers. UPMC officials have argued that Highmark became a direct competitor, rather than a business partner, by acquiring its own hospital network.

Whether settling the federal antitrust litigation will lead to a thaw in the contract situation between Highmark and UPMC is unclear. After 2014, only Children’s Hospital and Western Psychiatric Institute & Clinic in Pittsburgh, UPMC Northwest and UPMC Bedford Memorial will remain in Highmark’s network of providers.

UPMC attorneys said they’ve agreed to the antitrust settlement, though Highmark’s board must still approve the deal, according to Highmark attorney Margaret Zwisler.