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Judge hears arguments in ongoing battle between Highmark, UPMC

| Friday, Jan. 4, 2013, 1:20 p.m.

A federal judge should throw out UPMC's claim that Highmark Inc. and West Penn Allegheny Health System conspired to keep other insurers out of Western Pennsylvania and damage UPMC's business because the claim is not plausible, a lawyer for Highmark argued on Friday.

UPMC demonstrated in 2010 that it can bring in insurers because it signed contracts with several after its falling-out with Highmark, said Margaret Zwisler, one of Highmark's attorneys.

“It was entirely up to them” whether other insurers could operate in the region, she told U.S. District Judge Joy Flowers Conti.

Highmark and West Penn Allegheny have pending requests to dismiss UPMC's lawsuit, which is one of several lawsuits that have been filed since 2009, when West Penn Allegheny sued Highmark and UPMC with similar claims.

Conti likened the battle between Highmark and UPMC to a fight between two 800-pound gorillas, and the lawyers seized on that analogy in their arguments.

Zwisler contended that UPMC is the gorilla with the market dominance to push around competitors.

Leon DeJulius, one of UPMC's attorneys, argued that Highmark was the gorilla in 2002 when it forced a contract that kept the hospital system from signing contracts with other insurers for 10 years.

The contract forced UPMC to accept lower reimbursement rates from Highmark than it would have received in a competitive market. The fact that the hospital system grew despite the unfavorable contract does not exempt Highmark from UPMC's antitrust claim, DeJulius said.

Zwisler countered that UPMC could have ended the contract in 2009 but extended it through 2012. UPMC decided to get out of the contract only when Highmark announced its intent to acquire West Penn Allegheny, she said.

The lawyers agreed that West Penn Allegheny is not the gorilla.

Barbara Sicalides, West Penn Allegheny's lawyer, said employers will buy an insurance plan that does not include West Penn Allegheny's facilities and doctors, but they won't buy one that does not include UPMC's facilities and doctors.

“We can't harm competitors,” Zwisler said. “We don't have that power.”

Conti took the arguments under advisement.

Brian Bowling is a staff writer for Trib Total Media. He can be reached at 412-325-4301. or bbowling@tribweb.com.

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