Five Highmark customers claim the insurance giant and 37 other Blue Cross Blue Shield affiliates are violating federal antitrust laws and conspiring to drive up premiums by squelching competition in Western Pennsylvania and elsewhere.
Their federal lawsuit filed Wednesday in Pittsburgh is similar to more than two dozen antitrust claims filed nationwide against the Blue Cross Blue Shield Association and its affiliates. Judges ordered those lawsuits consolidated into a single case in a Birmingham federal court.
The three subscribers and two businesses that use Highmark sued in U.S. District Court and seek class-action status for their lawsuit. They say the Chicago-based association dominates markets through agreements that give member insurance companies such as Highmark the exclusive right to operate if they agree not to compete with one another.
The licensing agreements and lack of competition allow Highmark and other Blues to artificially inflate premiums, the lawsuit charges.
“Full and fair competition is the only answer to artificially inflated prices, and competition is not possible so long as Highmark and BCBSA are permitted to enter into agreements that have the actual and intended effect of restricting the ability of 37 of the nation’s largest health insurance companies from competing in Western Pennsylvania,” states the lawsuit filed by lead attorney Andrew M. Stone.
The Blue Cross Blue Shield Association said the system has worked well for decades and keeps costs down.
“We believe this litigation is without merit, and we will vigorously defend our system and the benefits it provides to customers,” said association spokesman Tilden Katz.
Highmark spokesman Aaron Billger said the Downtown-based company had not seen the lawsuit and could not comment.
The lawsuit seeks attorneys’ fees and damages of triple the difference between what the insurer charges and what the plaintiffs say they should pay. The plaintiffs are Kathryn Scheller and Michael Spreng of Valencia, Matthew Rutkowski of Mt. Lebanon, Lawrenceville-based Moss Architects and Iron Gate Technology in the North Side.
Stone and other lawyers listed on the lawsuit sued Highmark and UPMC in 2010 on behalf of subscribers claiming the insurance company colluded with the hospital system to keep competitors out of the area, which allowed Highmark to hike premiums.
That lawsuit is pending even though Highmark and UPMC have become competitors through the insurer’s purchase of West Penn Allegheny Health System, the No. 2 hospital chain in the market. Highmark proposed settling the claims by paying attorneys up to $4.5 million and helping them pursue an antitrust case against UPMC.
U.S. District Judge Joy Flowers Conti this month nixed the agreement.
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May 23rd, 2013