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Highmark seeks injunction to preserve proposed affiliation with WPAHS

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PITTSBURGH (Oct. 2, 2012) — In an effort to preserve the proposed affiliation agreement between Highmark and West Penn Allegheny Health System (WPAHS) which Highmark continues to believe is in the best interest of the community, Highmark is asking the Pennsylvania Court of Common Pleas of Allegheny County for a temporary restraining order to prevent WPAHS from starting affiliation/acquisition discussions with other organizations and to protect the large financial investment Highmark has already made in the WPAHS.

Highmark categorically denies the WPAHS claim that Highmark has breached the affiliation agreement. Highmark urges WPAHS to change its position and work cooperatively to move forward with the proposed affiliation.

In light of the ongoing concerns about the short-term and long-term financial condition of WPAHS, Highmark has strived to work collaboratively with WPAHS to develop a mutually agreed upon restructuring of WPAHS' obligations that significantly improves the health system's financial condition and creates a strong foundation for success in the long term and protects the pensions of all WPAHS employees.

Highmark and WPAHS are obliged under the affiliation agreement to use "reasonable best efforts" to close the transaction. Although a financial restructuring is one option that must be considered to meet these objectives, Highmark is open to considering alternative WPAHS proposals that would sustain the system's long-term financial soundness and that could be approved by the Pennsylvania Insurance Department (PID). The PID did not ask for, and has not required, bankruptcy as part of a long-term plan to ensure the system's long-term financial viability.

Highmark continues to believe that WPAHS is an important community asset that is vital to Western Pennsylvania, as reflected by the fact that Highmark has already provided more than $225 million in loans and grants for necessary capital improvements at WPAHS as well as for WPAHS' operating needs, and has committed to provide additional financial support. We will continue to work diligently to take responsible steps to help preserve WPAHS as a strong provider in the regionís health care delivery system.

About Highmark
Highmark Inc., based in Pittsburgh, is an independent licensee of the Blue Cross and Blue Shield Association, an association of independent Blue Cross and Blue Shield companies. Highmark serves 4.9 million members in Pennsylvania, West Virginia and Delaware through the company's health care benefits business and is one of the largest Blue plans in the nation. Highmark has 20,000 employees across the country and provides a broad range of health and wellness related services through subsidiary and affiliate companies. For more information, visit www.highmark.com.