PITTSBURGH — West Penn Allegheny Health System has pulled out of a merger agreement with insurer Highmark, Inc.

West Penn, which operates hospitals in the Pittsburgh area, says in a statement today that Highmark breached parts of the agreement and demanded that the hospital group restructure through bankruptcy.

Highmark denies that it breached the agreement, and says it still believes an affiliation is in the best interests of both companies.

West Penn, which has been losing money in recent years, says it is open to new discussions with Highmark.

Highmark, the state’s largest insurer, announced the $475 million takeover of the six-hospital West Penn Allegheny system last November. State regulators must still approve any deal.