The Department of Justice's Antitrust Division issued a statement today that paves the way for Pennsylvania's largest health insurer Highmark to affiliate with West Penn Allegheny Health System, the second-largest hospital network in the region.
"After a thorough review of the affiliation agreement and other evidence collected by the Antitrust Division in its investigation, the division has determined that the affiliation agreement likely will not reduce the competition in the market for hospital, physician or health insurance services," the DOJ said in the statement.
Highmark's acquisition plans came at a time when West Penn was on the brink of foreclosure. Details of the insurer's $475 million plan to acquire West Penn Allegheny Health System surfaced last year, and terms finalized between the two November 2011.
The DOJ concludes the Highmark-West Penn affiliation "will likely make West Penn a stronger competitor to UPMC "because of the added capital Highmark can pump into the health system."
A falling out between UPMC and Highmark, which began spring 2011 when Highmark started pursuing West Penn, has resulted in UPMC's public refusal to renew a contract with Highmark when the current one between the two expires in June 2013.
Meanwhile, a second antitrust saga involving West Penn and UMPC remains on the books. It began in 2009 when West Penn accused both UPMC and Highmark of working together to lessen competition. After Highmark signed the affiliation agreement to acquire West Penn, the health system petitioned to have Highmark removed as a defendant in that antitrust case.
This March, a U.S. district judge was removed from the antitrust case after West Penn attorneys claimed he was biased in favor of UPMC. Last week, the U.S. Court of Appeals quietly assigned a new judge to the case, a rare move given the boot of the previous district judge, according to The Pittsburgh Post-Gazette.
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"After a thorough review of the affiliation agreement and other evidence collected by the Antitrust Division in its investigation, the division has determined that the affiliation agreement likely will not reduce the competition in the market for hospital, physician or health insurance services," the DOJ said in the statement.
Highmark's acquisition plans came at a time when West Penn was on the brink of foreclosure. Details of the insurer's $475 million plan to acquire West Penn Allegheny Health System surfaced last year, and terms finalized between the two November 2011.
The DOJ concludes the Highmark-West Penn affiliation "will likely make West Penn a stronger competitor to UPMC "because of the added capital Highmark can pump into the health system."
A falling out between UPMC and Highmark, which began spring 2011 when Highmark started pursuing West Penn, has resulted in UPMC's public refusal to renew a contract with Highmark when the current one between the two expires in June 2013.
Meanwhile, a second antitrust saga involving West Penn and UMPC remains on the books. It began in 2009 when West Penn accused both UPMC and Highmark of working together to lessen competition. After Highmark signed the affiliation agreement to acquire West Penn, the health system petitioned to have Highmark removed as a defendant in that antitrust case.
This March, a U.S. district judge was removed from the antitrust case after West Penn attorneys claimed he was biased in favor of UPMC. Last week, the U.S. Court of Appeals quietly assigned a new judge to the case, a rare move given the boot of the previous district judge, according to The Pittsburgh Post-Gazette.
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