Highmark’s acquisition of West Penn Allegheny Heath System has been approved by the state Insurance Department.

The approval, issued after 18 months of department review, lays the foundation for Highmark’s plans to establish an integrated delivery network (IDN).

Pennsylvania Insurance Commissioner Michael Consedine said the order was approved with conditions. He said the department identified a number of concerns and imposed conditions to provide appropriate safeguards to protect consumers, the public and community hospitals, as well as preserve fair competition and protect the financial stability of Highmark.

According to a press release, the conditions are designed to "promote continued competition in the region and encourage policyholder savings and reduced premiums; maximize access to Highmark’s IDN for unrelated providers, community hospitals and insurers; monitor the impact of the transaction on community hospitals and hold Highmark accountable to its stated intention to enhance community hospitals; limit potential adverse competitive effects on insurers and providers contracting with Highmark and West Penn; reduce the financial risk to Highmark and its policyholders associated with continued financial commitments to West Penn or its IDN; provide transparency and, where appropriate, departmental review of future transactions that may not otherwise be subject to the department’s jurisdiction; hold Highmark accountable for its stated benefits associated with its IDN, including policyholder savings and continued competitiveness of community hospitals; require Highmark’s continued commitment to community and charitable endeavors; and address the potential termination of the UPMC contract in 2015 by requiring disclosure and communications to patients and subscribers."