Pittsburgh’s major medical systems are negotiating a settlement that could end the fiercely-fought antitrust litigation that has been pending in federal court for years.
The agreement would have both the University of Pittsburgh Medical Center and Highmark drop their antitrust suits against each other, according to Highmark spokesman Michael Weinstein.
The West Penn Allegheny Health System had originally sued both UPMC and Highmark, but this spring it became affiliated with Highmark. The settlement won’t become final until the West Penn board agrees to the terms—its next scheduled meeting is Oct. 31, Weinstein said.
The basic outline of the agreement, under which each party agrees to drop its suit, grew out of the deal facilitated by Gov. Tom Corbett in the spring of 2012 that extended the agreement between UPMC, which runs many of the hospitals in Western Pennsylvania, and Highmark, the dominant health-insurance provider in the area, for coverage of Highmark customers through 2014.
Also included in that agreement was a provision requiring Highmark to drop its suit against UPMC and for it to drop the West Penn suit once it acquired West Penn, as well as all counterclaims.
UPMC filed a motion to enforce that element of the settlement in June.
“On May 2, 2012, Pennsylvania Governor Thomas Corbett brokered a binding settlement agreement between UPMC and Highmark that resolved the parties’ highly publicized and contentious contract dispute. In exchange for receiving its sought-after contract extension with UPMC, Highmark expressly agreed that” it would dismiss the antitrust suits, UPMC argued in its brief in support of that June motion.
“The only provision of the settlement agreement remaining to be completed is Highmark’s dismissal of the WPAHS case—which Highmark and WPAHS repeatedly have represented to the court is forthcoming,” UPMC argued in the brief.
“Highmark told the court in May 2012 that it ‘expect[ed] that all of the pending claims in the UPMC action and the West Penn action will be dismissed upon approval of the Highmark-West Penn Allegheny affiliation by the Pennsylvania Insurance Department,’” UPMC’s brief says, quoting from an early court filing made by Highmark.
Highmark’s acquisition of West Penn Allegheny Health System became final in April, but the West Penn board still must vote on the agreement.
“Right now, the preliminary, tentative agreement is subject to action by the West Penn board,” Weinstein said.
U.S. District Chief Judge Joy Flowers Conti of the Western District of Pennsylvania held a scheduling conference Wednesday, which is where the deal was discussed.
She got control of the case in early 2012, when the U.S. Court of Appeals for the Third Circuit reassigned it from U.S. District Judge Arthur J. Schwab’s docket at West Penn’s request. Schwab is also a judge in the Western District of Pennsylvania.
In late 2009, Schwab granted UPMC’s motion to dismiss and the following year, the Third Circuit reversed the opinion and remanded the case to him for further proceedings.
In its request for a new judge, West Penn wrote to the appeals court, “This litigation’s progression, or lack thereof, since this court’s 2010 mandate reversing the district court’s dismissal of West Penn’s claims has been both remarkable and inexplicable.”
The appeals court made the change in a rare move without explanation.
If the agreement to drop the long-litigated suits is made final after the Oct. 31 board meeting, it will mark the end of the antitrust litigation, but will not affect other, unrelated lawsuits involving the Western Pennsylvania medical giants.