Highmark Releases Plan to Pull West Penn Allegheny Out of Debt
Highmark and West Penn Allegheny Health System (WPAHS) have agreed to an out-of-court deal that would have the health insurer buy out the outstanding debt load of WPAHS.
The two nonprofits released a joint statement on Wednesday afternoon, saying the companies' original affiliation agreement had been amended to include the new proposition.
"The agreement paves the way to advance the proposed Highmark-WPAHS affiliation to the Pennsylvania Insurance Department (PID) for its consideration, enables WPAHS to restructure its debt out of court, and preserves the pensions of some 12,000 health system employees," reads part of the press release.
Highmark declined to comment further, and WPAHS has not replied to an interview request.
Specifically, Highmark has offered to pay off the outstanding bonds issued for WPAHS by the Allegheny County Hospital Development Authority at 87.5% of the bonds' total cost.
If the affiliation agreement between Highmark and West Penn Allegheny is approved by the state insurance commissioner, then WPAHS would become the centerpiece of a large regional health system with ties to Highmark. In addition to WPAHS, Highmark also has affiliation plans with Jefferson Regional Medical Center in the South Hills and Saint Vincent Health System in Erie. The proposed network is meant to rival that of UPMC, which began to cut ties with Highmark a few years ago.