July 27--Attorneys litigating a class action conspiracy lawsuit led by real estate firm Royal Mile Co. against UPMC and Highmark Inc. have reached a tentative settlement with Highmark -- but not yet with UPMC.

Royal Mile and health insurer Highmark have reached an agreement in principal, and signed a "memorandum of understanding" this week. The actual settlement paperwork is to be filed within 30 days.

The agreement was not unexpected, as Royal Mile had filed a motion at the beginning of July telling the U.S. District Court that it was in settlement talks with Highmark.

The Whitehall-based real estate firm filed a federal lawsuit in 2010 alleging that a "conspiracy" between Highmark and UPMC had raised the firm's health insurance premiums.

Royal Mile said that UPMC, back then, had refused to contract with major, national health insurance companies, while Highmark, "in exchange," had eliminated a low-cost insurance product.

The alleged result was higher premiums that cost Royal Mile and other area businesses millions of dollars.

The Royal Mile suit had been filed in conjunction with an earlier federal suit, initiated by West Penn Allegheny Health System, which had likewise argued that Highmark and UPMC conspired to squeeze WPAHS out of the local health care market.

But Highmark and WPAHS are now business partners; Highmark and UPMC have arrived at a contract extension that runs through 2014; and UPMC has since entered contracts with a variety of national health insurance companies.

Royal Mile and the rest of the class will receive "prospective injunctive relief," but not financial damages -- Highmark has agreed that WPAHS "will not enter into any contract with any health care insurer that requires the insurer to treat West Penn more favorably than any other provider of health care services" through 2014.

In other words, no more "favored nation" contracts in which one party gets more favorable rates than the rest.

In addition, Highmark has agreed to "cooperate reasonably in the continued litigation" of the Royal Mile suit against the non-settling defendants, meaning UPMC.

As a result, Highmark will furnish Royal Mile and the plaintiffs with certain documents relating to the alleged antitrust conspiracy between Highmark and UPMC,

The memo also says that Highmark, within 20 days of the approval of the settlement, will provide Royal Mile and plaintiffs' counsel "with copies of all economic studies in its possession that may support an antitrust claim against" UPMC.

The settlement, after it is filed, would still have to be approved by the court. On Thursday, Highmark said that as "there is no final settlement agreement between Highmark and Royal Mile, [we] have no statement at this time."

Bill Toland: btoland@post-gazette.com or 412-263-2625.

___

(c)2012 the Pittsburgh Post-Gazette

Visit the Pittsburgh Post-Gazette at www.post-gazette.com

Distributed by MCT Information Services