UPMC to Settle Antitrust Class Action Lawsuit for $12.5M

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According to court documents filed last week, the University of Pittsburgh Medical Center (UPMC) will pay $12.5 million to settle a class action lawsuit accusing it of conspiring with Highmark Inc. to inflate the price of small group insurance plans.

The court documents indicate that the parties participated in mediation on Jan. 28 and reached a class action settlement that would resolve all claims against UPMC, and are in the process of preparing the settlement documents to file with the court.

“But under the current case schedule, expedited discovery (which is intended to obtain information necessary for class certification proceedings) begins on February 11, 2016, and Plaintiff and UPMC will have to pursue discovery against each other and Highmark while simultaneously seeking approval of a settlement resolving the claims to which much of the discovery will be directed,” the court documents state.

The parties have asked the court for a 90-day stay and an extension of the case deadlines to allow the parties to seek approval of their proposed class action settlement agreement.

“Absent a stay and extension of deadlines, and given the breadth of issues here, Plaintiff and UPMC cannot afford to delay class discovery between each other, on Highmark, on putative class members, on third parties, and on the claims against UPMC,” the court documents read.

“UPMC, in particular, would not have a need to serve discovery on Plaintiff, Highmark, or third parties if the settlement is approved and UPMC is out of the case,” the court documents continue. “Given Plaintiff’s and class counsel’s roles as stewards for resources of the class, and UPMC’s role as a nonprofit entity, the parties to the settlement seek a ninety-day extension to avoid expenditure of unnecessary resources.”

The antitrust class action lawsuit was initially filed in December 2010, and plaintiff Cole’s Wexford Hotel Inc. joined the case in August 2012. The class action lawsuit accuses Highmark and UPMC of participating in a conspiracy to keep competitors out of the market and to inflate the price of small group insurance plans.

According to the antitrust class action lawsuit, Highmark transferred small group insurance plans to a for-profit subsidiary, which charged inflated prices until state regulators intervened.

The UPMC class action lawsuit was partially dismissed on two occasions. In September 2015, a judge again granted partial dismissal of the UPMC class action lawsuit. The current version of the class action lawsuit asserts claims on behalf of small-group subscribers who paid premiums to a for-profit subsidiary of Highmark between 2010 and 2012. A Class certification hearing is currently set for Oct. 21, 2016.

The proposed class action settlement will not resolve any claims against Highmark.

More information about the proposed UPMC class action settlement was not immediately available. Keep checking TopClassActions.com or sign up for our free newsletter for the latest updates. You can also mark this article as a “Favorite” using your free Top Class Actions account to receive notifications when this article is updated.

Cole’s Wexford is represented by Del Sole Cavanaugh Stroyd LLC, Boies Schiller & Flexner LLP, the Law Office of Scott M. Hare, Stone & Magnanini LLP, Stone Law Firm LLC, and Carlson Lynch Sweet & Kilpela LLP.

The UPMC Insurance Plan Class Action Lawsuit is Cole’s Wexford Hotel Inc. v. UPMC, et al., Case No. 2:10-cv-01609, in the U.S. District court for the Western District of Pennsylvania.

UPDATE: The UPMC small group health insurance class action settlement is now open! Click here to file a claim.