A long running antitrust dispute in Western Pennsylvania continued on October 1, when a Pennsylvania hotel (Cole's Wexford Hotel) filed a third amended antitrust class action complaint against Highmark, the largest commercial health insurer in Western Pennsylvania, and UPMC, the largest health system in the area. The complaint alleges that Highmark and UPMC reached an unlawful agreement to exclude other insurers from entering the market, increasing the cost for health insurance in the region.
The case, Royal Mile v. UPMC, has already been pending for over four years in the Western District of Pennsylvania. Prior versions of the complaint have been dismissed by District Judge Joy Flowers Conti on the grounds that the plaintiffs' challenge was barred by the "Filed Rate Doctrine," an antitrust doctrine that prohibits a plaintiff from raising an antitrust challenge to rates that have been approved by a regulator. Judge Conti held that because the rates charged by Highmark were approved by the Pennsylvania Department of Insurance, the plaintiffs' earlier claims for damages were barred as a matter of law.
Based upon these prior rulings, two of the original named plaintiffs that had purchased insurance from Highmark (including named plaintiff Royal Mile) are no longer in the case. However, a third named plaintiff, Cole's Wexford Hotel, purchased its insurance from a forprofit subsidiary of Highmark (Highmark Health Insurance Co.), which Cole's alleges did not file its rates with the Insurance Commissioner prior to 2012. Accordingly, Cole's alleges that the Filed Rate Doctrine is no impediment to its antitrust claims, nor to the claims of a class of similarly situated small employers that purchased insurance from the Highmark for-profit subsidiary. Highmark's response to the new complaint is due on October 31. Stay tuned.
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