Highmark

Hospitals and insurers never have an easy time negotiating contracts, but the level of brinkmanship in Pittsburgh between Highmark Inc. and the University of Pittsburgh Medical Center was unusual by any measure. In a bid to compete if it failed to get a contract with UPMC, which has more than 20 hospitals and its own health insurance company, Highmark even went as far as buying the financially ailing West Penn Allegheny Health System in a deal valued at up to $475 million when it was announced last year.

MEDecision Inc., of Wayne, a provider of health-care management software systems, has been selected to provide its Alineo case management system to Highmark Inc., of Pittsburgh, one of the nation's largest health insurers, covering 4.8 million people. Although the contract's value was not disclosed, MEDecision said Highmark will be its second-largest customer after Health Care Service Corp, a Chicago health benefits company that owns MEDecision.    - Jane M. Von Bergen

Kenneth Melani was supposed to become the new CEO of Independence Blue Cross under terms of a proposed merger with Highmark Inc., the state's largest health insurer. Now, Melani, 58, is on unpaid leave from the Pittsburgh insurer, charged with simple assault and defiant trespass, both misdemeanor offenses, after allegedly getting into a fistfight with his mistress' estranged husband Sunday afternoon. According to the authorities, Melani said that if the police had not been there, he would have killed his mistress, Melissa Myler, and her husband, Mark Myler.

PUBLIC "information hearings" have started on the proposed merger of Independence Blue Cross and Highmark Inc. that could create the largest health-insurance company in Pennsylvania. The key word is "information. " The state Insurance Department will review Blue Cross and Highmark data to determine if the new mega-insurer, which will cover about 50 percent of the statewide market, meets state standards for businesses, and how it would affect competition and the consumer. But the "information hearings" don't allow for an independent public advocate to question the two insurers about their plans.

Because Highmark Inc. subscribers and Independence Blue Cross subscribers live on opposite ends of the state, the proposed merger of Pennsylvania's largest health insurers won't harm competition - as critics have feared. That's what the two companies said in a massive filing posted online at 5:30 p.m. yesterday by the Pennsylvania Insurance Department. The filings, submitted Friday afternoon, run to nearly 3,000 pages and include financial information about each company, organizational charts and links to past filings.

Yesterday's decision by Pennsylvania's two largest health insurers to merge would create a behemoth that would handle more business than all but two national competitors. Independence Blue Cross and Highmark Inc. say they intend to maintain dual headquarters in Philadelphia and Pittsburgh, employ more than 18,000 people in Pennsylvania, and improve health-care access and quality throughout the state while looking aggressively to expand. But much about the proposed transaction between the nonprofit holding companies remains unknown, including whether subscribers will see any reduction in premiums.

Key Pennsylvania legislators likely will urge the state to turn down the proposed merger between giant health insurers Independence Blue Cross and Highmark Inc. or at least to impose strong conditions, sources said yesterday. Members of the Senate Banking and Insurance Committee are set to vote on its nonbinding recommendations Thursday, but the final merger decision rests with Insurance Commissioner Joel Ario. The high-stakes merger of the nonprofit Blues would create the largest health insurer in the state.

If Pennsylvania's insurance commissioner decides to approve the proposed merger between Independence Blue Cross and Highmark Inc., he should impose a raft of conditions designed to limit their market power. So says the Republican-led Senate Banking and Insurance Comittee in draft resolutions scheduled to come for a committee vote tomorrow. The decision on whether to approve the merger rests with Commissioner Joel Ario alone. But the committee has lots of opinions on what Ario should do, starting with a plea that he reject it. "For him to recommend that this merger go through, it's unconscionable," said Sen. Donald J. White, the committee chairman and an insurance broker from Indiana, Pa. White, a Republican, said he believed the merger of Philadelphia-based IBC and Pittsburgh-based Highmark, which will create the largest health insurer in the state, will so limit competition that hospitals and doctors will have little voice in fees and that insurance will become unaffordable to consumers.

THE PROPOSED merger of Independence Blue Cross and Highmark, which would create the third-largest health-care provider in the country, should be greeted with caution and handled with care. Lost in the fanfare of this long-expected announcement is the answer to a simple question: What real impact will the joined companies have on subscribers, other health-insurance companies and the state's health-care costs? To hear Independence Blue Cross and Highmark tell it, it will be a wonderful day in the neighborhood for all. Administrative fees will be reduced for two years, and with better-managed drug costs, customers will save $580 million.

The state's biggest health insurer, Highmark Inc., has agreed to pay $38.5 million to settle civil claims stemming from what federal authorities yesterday called one of the largest frauds ever uncovered against the Medicare program. In a related development, a former Highmark vice president has pleaded guilty to three misdemeanors and is cooperating in a criminal investigation that is expected to result in charges against other former executives, Harrisburg-based U.S. Attorney David Barasch announced.

Hospitals and insurers never have an easy time negotiating contracts, but the level of brinkmanship in Pittsburgh between Highmark Inc. and the University of Pittsburgh Medical Center was unusual by any measure. In a bid to compete if it failed to get a contract with UPMC, which has more than 20 hospitals and its own health insurance company, Highmark even went as far as buying the financially ailing West Penn Allegheny Health System in a deal valued at up to $475 million when it was announced last year.

Horizon Blue Cross Blue Shield of New Jersey said it will open the state's first health insurance retail center this summer in Moorestown's East Gate Square Shopping Center. The center will have staff trained to help customers with their health insurance needs and to assist them in purchasing health insurance products and services. Blue Cross companies in Pennsylvania, Florida, California and South Carolina have opened similar stores, according to Horizon. Highmark, for example, Pennsylvania's largest insurer, has eight Highmark Direct locations in the state.

Highmark Inc.'s Kenneth R. Melani, CEO of Pennsylvania's largest health insurer, who was supposed to take over that same post at Independence Blue Cross under terms of a merger that never happened, has been fired, Highmark announced Sunday. Melani, 58, had been on unpaid leave from the Pittsburgh insurance company, where he was also president, after his arrest on charges stemming from a fistfight he allegedly had with his mistress' estranged husband last week. His termination followed a Sunday meeting of Highmark's board of directors, the company said in a statement.

Kenneth Melani was supposed to become the new CEO of Independence Blue Cross under terms of a proposed merger with Highmark Inc., the state's largest health insurer. Now, Melani, 58, is on unpaid leave from the Pittsburgh insurer, charged with simple assault and defiant trespass, both misdemeanor offenses, after allegedly getting into a fistfight with his mistress' estranged husband Sunday afternoon. According to the authorities, Melani said that if the police had not been there, he would have killed his mistress, Melissa Myler, and her husband, Mark Myler.

Memo to Kenneth R. Melani, chief executive of Highmark Inc., Pennsylvania's largest health insurer: Rent a shore house in Delaware, make it your happy spot, because it's definitely been more tranquil for you in the First State than it has been in the Keystone State. These days, it's not even peaceful in Pittsburgh, Highmark's corporate headquarters, where Highmark and the city's most prestigious hospital system are engaged in high-stakes brinkmanship affecting tens of thousands of patients.

In the Region Saul Ewing to merge with Boston firm Saul Ewing L.L.P. , of Center City, said it planned to merge with the Boston real estate and business law firm Dionne & Gass L.L.P. , effective July 1. The merger will bring seven new lawyers to Saul Ewing, five as partners, one as special counsel, and another as an associate, and expand Saul Ewing's East Coast presence with its first office in Boston. The combined law firm will retain the Saul Ewing name and have 235 lawyers.

MEDecision Inc., of Wayne, a provider of health-care management software systems, has been selected to provide its Alineo case management system to Highmark Inc., of Pittsburgh, one of the nation's largest health insurers, covering 4.8 million people. Although the contract's value was not disclosed, MEDecision said Highmark will be its second-largest customer after Health Care Service Corp, a Chicago health benefits company that owns MEDecision.    - Jane M. Von Bergen

The Pennsylvania Insurance Department announced yesterday that it planned to investigate whether any of the state's four Blue Cross & Blue Shield insurance companies have engaged in "anticompetitive or unfair trade practices" that violate the law. Examinations of Blue Cross of Northeastern Pennsylvania, Capital BlueCross, Highmark Inc., and Philadelphia-based Independence Blue Cross will begin this month and are to be finished by early 2010. "When Highmark Blue Shield and Independence Blue Cross withdrew their consolidation proposal earlier this year, it was good news for consumers," Insurance Commissioner Joel Ario said.