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UPMC rejects state Attorney General Shapiro’s attempt to halt breakup with rival Highmark | TribLIVE.com
Allegheny

UPMC rejects state Attorney General Shapiro’s attempt to halt breakup with rival Highmark

Natasha Lindstrom
| Thursday, February 21, 2019 7:26 p.m
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The UPMC sign sits atop the U.S. Steel Tower in Downtown Pittsburgh.

Pennsylvania Attorney General Josh Shapiro is overstepping his authority by attempting to force UPMC to work together with rival health system Highmark beyond this summer’s expiration of a state-brokered agreement, UPMC argued Thursday in court filings.

UPMC asked the Commonwealth Court to reject Shapiro’s petition to rewrite a 2014 consent decree between the two Pittsburgh-based health care giants that control both insurer and provider arms.

Separately, UPMC filed a class-action lawsuit in federal court seeking relief so it can be “free from unlawful state interference,” claiming that Shapiro’s efforts are not only “anti-competitive” and “irrational” but also violate federal regulations and due process rights guaranteed by the U.S. Constitution. UPMC further accused Shapiro of “intervening in a high-profile matter solely to advance his own political goals.”

“The Attorney General unilaterally has imposed these rules through backroom demands and threats, without any legislative rulemaking,” UPMC wrote. “And these changes are extreme.”

Among other demands, Shapiro asked UPMC hospitals and doctors to accept Highmark patients “in perpetuity” and drop a controversial prepay rule threatening to impact thousands of Highmark-insured Medicare Advantage patients when it takes effect in July.

“The petition exceeds (Attorney) General Shapiro’s authority, and it should be dismissed in its entirety,” UPMC wrote in its motion filed Thursday afternoon in Commonwealth Court.

Shapiro’s office fired back in a statement to the Tribune-Review that it’s “very confident” in its legal petition on behalf of “health care consumers who are getting an unfair deal from UPMC.”

Attorney General’s Office spokesman Joe Grace said Shapiro is “not intimidated” by UPMC’s arguments.

“With their filings (Thursday), UPMC has shown they intend to spend countless hours and untold resources on a legal battle instead of focusing on their stated mission as a nonprofit charity — promoting the public interest and providing patient access to affordable health care,” Grace said.

“We seek a resolution that protects patients, not a continuation of the protracted conflict and bickering that has impacted Western Pennsylvania for many years.”

As it stands, the state-brokered consent decree between UPMC and Highmark expires June 30, which means Highmark-insured patients will become out-of-network at most UPMC hospitals on July 1. UPMC further plans to enforce a new rule that requires out-of-network patients to obtain a cost estimate and prepay, in full, for all nonemergency services before receiving treatment.

Shapiro ignored prior legal rulings and “recycled” inaccurate allegations when he asked a state court earlier this month to intervene, UPMC argued in court filings.

”General Shapiro now, after having enjoyed the benefit of UPMC’s agreement to abide by the decree for nearly five years, cannot renege on the release that secured the agreement,” UPMC wrote.

Shapiro announced Feb. 7 that he was filing the petition to modify the consent decree to require UPMC to accept Highmark and any other out-of-network patient in perpetuity.

He accused UPMC of breach of fiduciary duties and violating laws regarding charities, unfair trade and consumer protection.

Highmark — which asked UPMC to reconsider its prepay rule when it was announced last fall — still is reviewing UPMC’s latest filings but generally supports Shapiro’s petition because “it is in the best interest of the communities we serve,” Highmark spokesman Aaron Billger said by email Thursday.

“The Pennsylvania Attorney General, who is the regulator with respect to all charitable organizations with the authority to intervene to ensure that all charitable organizations fulfill their charitable obligations, has emphatically indicated that the type of behavior evidenced by UPMC will not be tolerated given all of the benefits accorded UPMC by the community,” Billger said.

Also on Thursday, 12 of 15 members on the Allegheny County Council sent a letter to UPMC CEO Jeffrey Romoff asking him to thwart a potentially “drawn-out and expensive lawsuit” and renew the decree or negotiate a new one, “so that the residents of Western Pennsylvania that have Highmark coverage can continue to be cared for by the doctors and hospitals of their choosing, including all UPMC doctors and facilities.”

“The individuals who will be denied access are, in many instances, exactly the same county taxpayers who subsidize the tax exemption which facilitates UPMC’s continuing construction and expansion,” council members wrote. “… As a nonprofit organization who has a responsibility to serve all patients without concern for monetary gain, do not add to the stress of our most vulnerable population by taking away the ability to see the doctors that they, most likely, have been seeing for decades.”

UPMC — the state’s largest nongovernmental employer with more than 84,000 employees — says it provides more than $900 million a year in benefits to communities, such as free and reduced-price medical care.

UPMC claims that Shapiro seeks to “impose radical new obligations on UPMC” that will cause “irreparable harm,” including dropping its prepay rule, contracting with any insurer or provider that wants a contract and making changes to its board and executive management.

“These unprecedented requirements go well beyond the original purpose of the consent decree,” UPMC wrote.

UPMC argued in the court filing that it is not denying access to out-of-network patients via the prepay rule. “It just requires that they pay in advance for the services, which it is permitted to do.”

Accessible health care does not mean “access to UPMC at in-network rates,” the filing said.

Under Medicare rules, “insurers and providers cannot be forced to contract with one another,” nor can the state enact requirements that do not uniformly apply to all insurers, UPMC wrote. It accused Shapiro’s proposal of “delegating price-fixing to self-interested, private parties.”

UPMC pointed out that last year, the state Supreme Court ruled that a court cannot “alter an unambiguous and material term of the consent decree — the June 30, 2019, end date.”

“Yet (Attorney) General Shapiro asks for that same relief again,” UPMC wrote in the court filings.

UPMC further argued that Shapiro took his latest legal action “without the participation” of the state insurance and health departments — “which had concluded that the Commonwealth had no authority to compel continued UPMC-Highmark contracts and were working to facilitate patient transition under the consent decree.”

“Insurance markets depend on clear legal rules, which are essential to projecting costs,” UPMC wrote. “Delay in providing the needed clarity here could impair the functioning of health insurance markets throughout the state.”

Shapiro’s 73-page legal challenge petition is posted on the attorney general’s website.

Natasha Lindstrom is a Tribune-Review staff writer. You can contact Natasha at 412-380-8514, nlindstrom@tribweb.com or via Twitter .

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