Pittsburgh judge rules against Highmark in hospitals' Medicare lawsuit

May 09--Highmark Inc. had no legal basis to cut Medicare reimbursements to a dozen Western Pennsylvania hospitals when the federal government reduced its payments to the insurer, an Allegheny County judge ruled.

Common Pleas Senior Judge R. Stanton Wettick ruled without a trial in favor of the hospitals, which sued last year on claims the state's largest insurer improperly shorted them 2 percent of Medicare Advantage reimbursement payments since Jan. 1, 2014.

They said the reduction, which Highmark and subsidiary Keystone Health Plan West enacted in response to the federal government's 2013 budget sequestration, violated the terms of their provider contracts. Wettick agreed in a ruling filed Wednesday.

"Highmark has been unable to point to any provision with the provider agreements that would support its 2 percent reduction from the amount Highmark is obligated to pay under the provider agreements," he wrote.

Highmark spokesman Aaron Bilger said that lawyers were reviewing the decision Friday afternoon and that the Downtown insurer would have no immediate comment.

An attorney for the hospitals could not be reached. The plaintiffs include St. Clair, Westmoreland Regional, Butler Memorial, Frick, Indiana, Latrobe Area and Jameson hospitals.

Court filings do not indicate how much money the hospitals say they are owed. Wettick scheduled a hearing for May 20 to determine damages.

Under Medicare Advantage, the federal government contracts with private insurance companies through the Centers for Medicare and Medicaid Services to administer benefits to seniors. Highmark has about 182,000 Medicare Advantage customers.

Highmark argued in court papers that its agreements with the hospitals allowed it and Keystone to adjust what they paid to providers "in the event of a reduction in reimbursement amounts paid to Highmark and (Keystone) by the Centers for Medicare and Medicaid Services."

The hospitals argued that Highmark could amend the agreements only to comply with a federal mandate or change in law and that the 2 percent budget spending cut did not meet that requirement.

David Conti is a staff writer for Trib Total Media. He can be reached at 412-388-5802 or [email protected].

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