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WPAHS countersues Highmark

By , - Last modified: October 17, 2012 at 11:33 AM

West Penn Allegheny Health System is seeking unspecified damages from Highmark Inc. for breach of their existing agreement but remains open to negotiating a new agreement with the insurer, according to a countersuit filed Tuesday.

West Penn Allegheny never refused to negotiate a new agreement with Highmark,” the filing said. “Instead, West Penn Allegheny believes that in light of Highmark’s rejection of the extant Affiliation Agreement and because West Penn Allegheny’s time without a partner is limited, it is incumbent upon the Board to assess all of its options, including, alternative partners, while, at the same time remaining open to negotiation of a new arrangement with Highmark.”

The two parties signed an affiliation agreement in November 2011 but have not yet obtained the Pennsylvania Insurance Department’s approval of the deal.

On Sept. 28, WPAHS announced its intent to explore other options for its future, saying Highmark had breached the terms of the agreement.

Highmark denied the breach and promptly sought a court injunction to prevent WPAHS from seeking other suitors, requesting that if the injunction were not granted, WPAHS be required to immediately pay damages and $200 million Highmark invested in the deal.

In its filing yesterday, WPAHS reported that Highmark said it would not close the current deal even if the PID approved it, pressuring WPAHS instead to consider a new agreement conditioned on its filing for bankruptcy.

WPAHS said PID reported that Highmark was delaying its assessment process, failing to answer PID requests from as long ago as January.

WPAHS also accused Highmark of failing to deliver promised incentives or increase patient volume, and in fact causing WPAHS physician groups to send patients to rival UPMC hospitals. It noted that the original agreement expires May 1, 2013.

 

Click here to read the court filing.

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