Highmark Submits Changes To Officials

July 17--Highmark Inc. has filed updated paperwork regarding its pending acquisition of West Penn Allegheny Health System.

On Friday, Highmark filed an amended "Form A," which is the name given to the transactional filing originally submitted by the Pittsburgh insurer in November related to its proposed affiliation with WPAHS.

The new form, submitted to the state Insurance Department, reflects changes that have been made to Highmark's organizational structure since the initial filing eight months ago, including its affiliation with Highmark Blue Cross Blue Shield of Delaware and the creation of several property acquisition companies.

"The amended Form A reflects the fact that we are required by the [insurance department] to report any material changes in our business," said Highmark spokesman Michael Weinstein.

Among the changes:

--As part of the affiliation agreement, Highmark received an option to become a 50 percent joint owner of WPAHS's core laboratory facility. But that option agreement was terminated on Feb. 13 this year.

--The amended Form A notes that Highmark's new CEO, former Department of Defense official William Winkenwerder Jr., starts work today. Dr. Winkenwerder's hiring was announced on June 4, two months after the firing of Highmark's previous CEO and president, Kenneth Melani.

--The amended Form A also makes note of Highmark's contract extension with UPMC, an agreement that will give Highmark commercial customers access to UPMC doctors and hospitals through Dec. 31, 2014. The new agreement, the company said, does not alter Highmark's pending acquisition or its "strategic vision."

--In January, Highmark officially sold its interest in its Medicare processing unit, Highmark Medicare Services, Inc., to a Florida company for $8.6 million in cash and a "distribution of capital and earnings received from HMS of $27.4 million in cash and receivables." Highmark announced the sale last December, but did not reveal its financial terms.

--On Aug. 1, Highmark Senior Resources Inc. intends to transfer all of its business to HM Health Insurance Co.Highmark Senior Resources is the company that sells Highmark'sMedicare Part D prescription drug plans. Mr. Weinstein described the shift of the senior unit to the HM umbrella as "part of normal shift of business [that] does not affect Highmark's actual Part D business operations."

Highmark is hoping its rescue of the financially ailing West Penn Allegheny Health System will help preserve choice in the Pittsburgh health care market. The acquisition is part of Highmark's ongoing effort to remake itself -- what once was a company that primarily trafficked in insurance services will be a integrated health company that runs hospitals, medical malls and medical supply chain firms.

Highmark and WPAHS hope the deal will be approved by the state sometime this year.

In addition to the amended Form A filing, Highmark has also recently filed restated bylaws for Highmark, West Penn Allegheny Health System and its proposed parent company, now being called UPE.

It also filed first-quarter financial statements for itself and each of its major subsidiary insurance companies; those quarterly statements were posted on the state Insurance Department website on Monday.

To see the amended Form A, go to http://www.governor.state.pa.us/portal/server.pt/document/1267088/0803_pdf?qid=60749826&rank=3.

Highmark's Quarterly Statement is available online at http://www.governor.state.pa.us/portal/server.pt/document/1267162/54771_2012_1q_pdf?qid=60416703&%20rank=10.

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

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