Highmark’s Ousted CEO Reflects On Fall

June 08--On the night of March 25, his face bloodied and right eye swollen shut, Dr. Ken Melani rode more than 60 miles to a friend's house at Nemacolin Woodlands.

Then CEO of Highmark Inc., the state's largest health insurer, he had been in a confrontation with an Oakmont man. Melani's face was so beat up, he did not want to be seen in public.

Melani, 58, stayed in seclusion for two weeks, nursing the wounds with ice bags and warm compressions. A married father of four and arguably one of Pittsburgh's most influential business leaders, he also needed time to deal with the emotional toll of watching his decades-long career and personal life suddenly derail.

"I was hurt," Melani told the Tribune-Review on Thursday, in his first public comments since Highmark fired him April 1, one week after the fight with his girlfriend's husband.

"I did a lot of crying. The personal destruction is something I can't even begin to explain to people. It was devastating," he said.

"I was dropped like a hot potato by everybody in Pittsburgh. As each day passed, I realized that the magnitude of what happened was catastrophic."

Shaken, ostracized

During a candid, two-hour conversation in a Pine restaurant, an often emotional Melani described how the incident shook his family, how he feels ostracized from the community and Highmark and how he is trying to rebuild his personal life and reputation. He delivered harsh but heartfelt words toward Highmark's board of directors for making a quick decision without having all the facts.

"I was treated like I had a communicable disease, like I was infecting the organization," Melani said, raising his arms in the air. "What hurts the most is that the company dropped me so fast."

Highmark board Chairman Bob Baum did not return calls for comment. Spokesman Michael Weinstein could not be reached.

The company has said Melani was fired because he repeatedly lied to senior management about his relationship with Melissa Myler, 28, a Highmark business analyst who specializes in sports marketing. Most recently, Myler helped put together a four-year contract for Highmark to sponsor Professional Golfers' Association of America tour events.

"The injuries resulting from Dr. Melani's gross and willful misconduct include injuries to the Blue Cross Blue Shield brand, the company's reputation, risk to business partners and financial harm," according to a Highmark statement announcing his removal.

Melani, who was paid $4.35 million last year, declined to speak about the status of his relationship with Myler or the status of his pension or severance package. One of his attorneys, Sam Cordes, told the Trib that litigation against the insurer remains a possibility.

'Performance speaks for itself'

Melani said he is in discussions with other employers -- some in Pittsburgh, some outside -- about other opportunities. He arrived for the interview alone in a white Cadillac, wearing jeans, a striped shirt and black loafers. His voice turned passionate at times, especially when he talked about his career and his accomplishments.

"Look at the performance of Highmark," Melani said, giving credit to former leaders such as John Brouse. He said his management skills helped the insurer to flourish and achieve national recognition. "My performance speaks for itself," he said.

Melani said he is particularly proud of helping establish Highmark Healthy High 5, a $100 million initiative to improve children's health, and the Highmark Caring Foundation, which helps children and their families who are grieving the death of someone close.

But Melani's reputation was tarnished March 25 in what became one of the most talked-about stories in town. Oakmont police said Melani showed up at Myler's home and walked inside. After Melani ignored requests to leave, the police report said, Myler's husband, Mark, led Melani to the front porch, where a fistfight ensued.

When police arrived, Melani made it clear he was in love with Myler. "(Melani) asked me in an emotional voice if I had ever had a relationship that was everything to me," an Oakmont police officer wrote in a report.

The police report said Melani and Myler began having an affair three weeks after she was hired at Highmark in October. Melani had met the Mylers at several golfing events. Melissa Myler had worked as operations director for the Mylan Classic golf event.

When asked about his relationship with his wife, Melani declined to comment. Attorney Robert Del Greco Jr. told the Trib in a story published yesterday that Melani and Myler continue to have a relationship that he described as "complicated." Myler remains employed at Highmark.

Prosecutors this week dropped simple assault and defiant trespassing charges against Melani after he completed 16 anger management classes. Melani was contrite and said his hurt was compounded by the ordeal's impact on the lives of so many relatives, friends and colleagues.

Family impact

"What really bothers me the most is that so many people have suffered through this process," he said. "I feel for them."

Melani choked back tears when he spoke about the impact on his parents, who are 85 and 88 and live in Cheswick, where he grew up.

One of the hardest parts of the ordeal was facing his children. Melani has two grown daughters -- ages 33 and 31 -- from a previous marriage. He and his wife, Tracy, have two other daughters, ages 11 and 2 1/2.

His voice trembled and tears welled in his eyes when he said his oldest daughters called him while he was staying at Nemacolin.

"We love you, Dad," he said they told him.

Melani said his personal life never affected his business decisions at Highmark, a company that generated $14.8 billion in revenue last year and employs more than 19,000 people.

"Everything I did was in the best interest of Highmark, with a business and community perspective in mind," he said.

Melani said his dismissal has not diminished his affection toward the health insurer, even though officials never allowed him to get his personal belongings from his office on the 31st floor of Fifth Avenue Place, Downtown. They were later delivered to him.

"I have Blues in my blood," he said in reference to the Blue Cross Blue Shield association to which Highmark belongs.

Melani, who orchestrated <org idsrc="xmltag.org" value="NASDAQ-MF:HGAFX">Highmark's ongoing acquisition of West Penn Allegheny Health System, declined to discuss the future of the deal, which is awaiting approval from state regulators.

Melani would say only that he knows Dr. William Winkenwerder Jr., Highmark's newly appointed CEO who previously worked at the Department of Defense and Blue Cross Blue Shield of Massachusetts and owned his own health care consulting firm.

Melani emphasized that he has been fortunate to have the support of family and friends, even though sometimes he feels like some people in public recognize him but are afraid to approach him.

He expressed gratitude to many business and community leaders who have reached out to him, including Murry Gerber, former head of EQT Corp., Giant Eagle CEO David Shapira and city sports figures Mario Lemieux, Ben Roethlisberger and Merril Hoge.

Melani had dinner Wednesday night with Steelers Hall of Fame running back Franco Harris.

"I'm not above being human because I'm Ken Melani," he said. "I've learned to be a better person. Does it mean I'll never make a mistake in my life again? Probably not. I mean, I'm human."

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