Highmark wants to waive state permission to infuse millions into Allegheny Health Network

Pittsburgh-based Highmark Health has filed documents with the Pennsylvania Insurance Commission asking the state to eliminate the requirement that it get permission before investing money in Allegheny Health Network in Pittsburgh, according to the Pittsburgh Post-Gazette.

As a condition to Highmark's 2013 purchase of AHN, it is required to report investments in AHN of $100 million or more and get permission from the state to invest $250 million or more in the hospital network. Highmark asked the state to eliminate these requirements in its recent filing with the Pennsylvania Insurance Commission.

Highmark Health spokesman Aaron Billger told the Pittsburgh Post-Gazette that the reporting and approval requirements have created an uneven playing field between Highmark and competitors in the Pittsburgh market.

"We've made significant financial progress and we've really moved to a transformational stage," Mr. Billger told the Pittsburgh Post-Gazette. "We believe the market dynamics have changed and the organization needs the flexibility to make timely and strategic investments."

Highmark Health, which includes insurer Highmark and AHN, ended 2016 with operating income of $64 million on revenue $18.2 billion, which was an improvement from the $565 million operating loss on $17.7 billion in revenue the system recorded in 2015. Hefty capital investments caused AHN's operating loss to widen to $39 million in 2016 from $36 million in 2015.

Highmark Health expects its financial performance to continue to improve, forecasting significant increases in operating income through 2020. That boost will be fueled, in part, by increases in patient volume due to the expiration of a consent decree with Pittsburgh-based UPMC in 2019 that preserves access to UPMC hospitals for vulnerable populations, including seniors and cancer patients, with Highmark insurance.

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