Highmark suspends CEO after assault arrest in dispute with mistress's husband
By Alex Nixon and Luis Fábregas,
Published: Friday, March 30, 2012
Highmark Inc. on Thursday moved swiftly to temporarily replace its CEO when details of his love affair with a younger co-worker emerged in an assault arrest.
The arrest of Dr. Kenneth Melani, 58, of O'Hara comes at a critical time for the state's largest health insurer, which is seeking to build a nearly $1 billion medical services operation to compete with UPMC, Western Pennsylvania's dominant health system. Melani, who was suspended without pay, has served as Highmark's public face since becoming chief executive officer in 2003.
Following emergency meetings by Highmark's board, the insurer announced last night that J. Robert Baum, a University of Maryland professor and Highmark's board chairman since 2005, was named interim CEO.
"We regret that this situation arose," Baum said in a statement. "The board is fully committed to Highmark's mission and the business strategies that will guide us going forward."
In an interview earlier, Baum told the Trib, "We always worry about a plane crash. We have a succession plan. It's not fun to pick up the pieces, but we're ready."
District Judge Jeffrey Herbst in Monroeville released Melani yesterday after his arraignment on criminal charges of simple assault and defiant trespass. The charges stem from a fistfight Sunday with the husband of Melani's mistress, according to a police affidavit.
"As I learn more, I'm becoming increasingly more optimistic that a favorable outcome can be reached," said attorney Robert Del Greco Jr., who represents the executive.
Melani earned $4.35 million last year, according to the nonprofit's state insurance department filings. He faces a preliminary hearing on Wednesday.
Highmark is trying to buy financially troubled West Penn Allegheny Health System in a $475 million deal. The state Insurance Commissioner will hold hearings on the acquisition next month. The insurer has committed an additional $500 million to buying doctor practices and building outpatient centers throughout the region.
Even though Melani played a big role in setting Highmark's strategy to integrate its health insurance business with a hospital system, his absence shouldn't affect those plans, experts said.
"Highmark is more powerful than its moving parts," said Jan Jennings, president of American Healthcare Solutions, a Downtown consulting firm. "(Melani) can take his hands out of that bucket of water, and the water level will be just fine in a matter of seconds."
Baum said Highmark's team of executives is strong and experienced. Although the charges surprised them, Baum said they are confident the insurer will move forward.
"We love Ken, and he's a great strategy guy," Baum said. "I feel pretty confident about our strategy. We all believe in it."
The allegations against Melani stem from a fight on Sunday afternoon at the home of Mark Myler, 49, on Canterbury Court in Oakmont. Officers found Melani and Myler outside arguing, both with swollen faces and minor bleeding, according to a police affidavit.
Mark Myler's wife, Melissa Myler, 28, told police that Melani hired her to work for Highmark in October and that three weeks later, they began having an affair. Melani's wife, Tracy, discovered the affair in January and informed Mark Myler. Melissa Myler moved into an upscale condo in O'Hara with Melani, the affidavit said.
She told police she later discovered Melani had hired a private investigator to look into her past, which sparked an argument. Their relationship became common knowledge at Highmark, and she hired an attorney to help her leave the company, the affidavit states.
On Sunday, she went to her husband's home. Melani showed up, walked in and accused Melissa Myler of cheating on him and only wanting him for his money, the affidavit states.
A fight erupted when Mark Myler removed Melani from the house, the affidavit said.
Melissa Myler told police she wasn't ending her relationship with Melani and did not intend to reconcile with her husband, the affidavit said.
A police officer overheard Melani making calls on his cell phone to attorneys and other people and telling someone, "If police hadn't been there he would have killed the Mylers," according to the affidavit.
Melani told police Mark Myler struck him first. In an emotional voice, Melani asked an officer if he ever had a relationship that meant everything to him. The officer did not answer.
The Mylers could not be reached.
Melissa Myler graduated from Slippery Rock University in 2007 with a bachelor's degree in sports management. She and Mark Myler were married in 2009.
It isn't clear how Melani and Melissa Myler met. She told police she and her husband had maintained a social relationship with Melani for several years. The couple golfed with Melani and attended sporting events together, according to the affidavit.
Melissa Myler worked as operations director of the Mylan Classic, a golf event for which Highmark was a founding sponsor. After Melani hired her, she worked as a sports marketing manager out of the insurer's headquarters at Fifth Avenue Place, Downtown. The job involved a lot of traveling.
Melani and Myler were often seen together. Myler stood next to Melani during a press event on Feb. 13 to celebrate the reopening of West Penn Hospital's emergency department in Bloomfield. They walked together as they toured the facility, according to people who attended the event.
David Kosick Sr., a local public relations expert, said the affair is a "black mark" for Melani, which could lead to his resignation. But it shouldn't affect Highmark's business, he said.
"Even though he's the face of Highmark, there are other people involved," he said.
Melani, a board-certified internal medicine doctor, joined Highmark in 1989 as corporate medical director. He served as the company's executive vice president in charge of strategic planning and marketing before being named CEO.
About Melissa Myler
Melissa Lazar Myler was a standout athlete who graduated from Knoch High School in 2002 and went on to earn a college degree in sports management.
Myler was featured in a Pittsburgh Catholic article in July 2010. That newspaper said Myler was a daughter in a military family who attended school in Rhode Island and Ohio in her youth.
The family returned to the area and she attended Knoch. In her senior year, she set a school record in the 200-meter dash, tied for the best time in the Alle-Kiski Valley in the 100-meter dash and played in the Alle-Kiski Cager Classic all-star basketball game.
She then graduated from Slippery Rock University with a degree in sports management.
As an intern with the U.S. Golf Association, she worked with volunteers and helped oversee player housing at the 2007 U.S. Open at Oakmont Country Club.
She worked as sales manager at a Blairsville golf course before taking a job in Washington County, where she coordinated about 550 volunteers for the Mylan Classic, a Nationwide Tour golf tournament in September 2010. She was working for Washington County Economic Development Inc., under the Washington County Chamber of Commerce.
The story noted that Myler and her husband, Mark, were members of St. Irenaeus Church in Oakmont.
According to public documents, Melissa Lazar and Mark Myler bought a house in Oakmont in 2008 and got married the following spring.
— Valley News Dispatch
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