AHERF lays off 96; HealthAmerica files suit. (Allegheny Health Education and Research Foundation)

DOWNTOWN - The parent foundation of Allegheny General Hospital said it will lay off 96 local workers who managed care for HealthAmerica subscribers.

The announcement came one day after HealthAmerica sued Allegheny Health Education and Research Foundation and its four local affiliated hospitals for $108 million in a dispute over AHERF's management of funds in a risk-sharing agreement between the insurer and the foundation.

AHERF, eight of its Philadelphia-area hospitals and its physician organization are currently in Chapter 11 bankruptcy. The bankruptcy filing came after AHERF's struggling institutions in the eastern part of the state weakened the company's finances.

The lawsuit and the layoffs are the result of a local deal gone bad between HealthAmerica and AHERF.

The AHERF employees affected are case managers who worked on managing the care of HealthAmerica's 290,000 subscribers in Western Pennsylvania.

The insurer's suit, filed in the Allegheny County Court of Common Pleas, seeks a court order compelling the four local AHERF hospitals, which are not …