AG Shapiro: Legal war against health giant UPMC has just begun |
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Natasha Lindstrom

UPMC’s newly relaxed prepay rules for Highmark-insured seniors and cancer patients have not assuaged Pennsylvania Attorney General Josh Shapiro’s intensity in his legal fight against the health giant.

As he prepares to face off UPMC in Commonwealth Court on Monday, Shapiro appears more determined than ever to take on UPMC — despite the unexpected changes UPMC announced days before the showdown.

“Everyone should know we are not going away, no matter what happens in court,” Shapiro told the Tribune-Review. “There are serious questions swirling around UPMC’s conduct that need to be answered through this litigation process.”

Shapiro, who wants to block the looming split of UPMC and Highmark, wants to see UPMC’s latest pledges detailed in writing.

He also wants far more concessions and broader commitments from UPMC — including getting the multibillion-dollar nonprofit health system to agree to contract with any willing insurer “in perpetuity.”

Through litigation, “we’re going to pore through UPMC’s documents” to examine several issues — including UPMC’s relationship with the University of Pittsburgh, the individual conduct of UPMC board members and UPMC CEO and President Jeffrey Romoff’s “use of charitable assets for personal use,” Shapiro told the Trib.

“Questions like that need to be answered to get at the heart of whether or not UPMC is acting like a charity,” Shapiro said.

UPMC — which touts spending hundreds of millions of dollars annually on community benefits and paying more than $500 million in taxes — accuses Shapiro of overstepping his authority in a politically motivated quest to reshape how health care works. The organization said he is violating state and federal laws, threatening UPMC’s ability to carry out its mission, and upending health care markets statewide.

Though Shapiro’s ultimate goals are far-reaching, the two-day trial set to begin Monday in Harrisburg is focused on a single dispute: whether Shapiro can change the end date of a 2014 state-brokered agreement between UPMC and Highmark.

“We have a strong and a good case to make,” Shapiro said.

The backdrop

Highmark said that, like Shapiro, it is wary of public promises and needs to see UPMC’s commitments in writing.

Highmark spokesman Aaron Billger said officials are ready to work with UPMC — “if UPMC is willing to work in good faith.”

Highmark agreed to most of Shapiro’s requests regarding affordable access to patients across both systems during negotiations outside of court last fall. UPMC did not.

Each health giant blames the other for putting patients in the middle of their corporate feud.

UPMC further accuses Shapiro of siding with Highmark’s interest over the public good.

For months, frustrated seniors flooded helplines and insurance brokers with questions about the split.

The Tribune-Review first reported how UPMC and Highmark clashed on Oct. 1. That’s when Highmark said it would pick up the out-of-network costs for Medicare Advantage members on its Freedom Blue and Security Blue plans at least through the rest of this year.

But UPMC surprised Highmark by saying it would force those members to prepay, in full, prior to receiving nonemergency treatment and seek any reimbursement from Highmark on their own.

Tens of thousands of Highmark members switched plans last fall and earlier this year. Many chose to reluctantly say goodbye to longtime doctors in Highmark’s Allegheny Health Network so they could retain affordable access to UPMC specialists.

On Wednesday, weeks before the prepay rule was to take effect, UPMC announced it would drop the costly requirement for more than 100,000 of Highmark’s Medicare Advantage patients in Western Pennsylvania. The Tribune-Review reported the same day that UPMC’s out-of-network prepay rule still would apply to Hillman Cancer Center patients, as well as to younger patients on employer plans or federal health exchange plans.

The next day, UPMC announced it would also allow access at in-network rates for all Highmark or Blue Cross/Blue Shield patients who seek oncology care and follow-up treatment at any of UPMC’s dozens of Hillman Cancer Center locations and physicians across Pennsylvania and Ohio.

“UPMC Health Plan does not allow its members to be placed in the middle and receive surprise medical bills when requiring out-of-network care,” UPMC spokesman Paul Wood said. “Should Highmark fail to pay the billed amounts directly to UPMC, UPMC will have to reconsider its decisions regarding prepayment and balance billing.”

Some patients, such as those who receive care at Hillman Cancer Center, are rejoicing about the relaxed prepay rules, which mean they no longer will have to find new oncologists.

“These doctors saved my life several times, and I don’t want to leave them unless I absolutely have to,” said Nancy Spohn, 67, a cancer patient from Connoquenessing Township, Butler County whose insurance is tied to the Highmark retirement benefits of her husband, a retired steelworker.

Others remain confused over their access to UPMC facilities once Highmark and UPMC officially split insurance networks at the end of the month.

“You only have UPMC’s word and remember, they were really sticklers about not changing the prepay rule before,” said Judy Hays, 74, a Highmark-insured cancer patient who recalled getting a robocall from UPMC in January warning her of the prepay requirement. Highmark has told her they need to have a written agreement in place before ensuring her she can maintain her UPMC cancer doctors.

Shapiro said Friday neither his office nor Highmark had received anything in binding, written form. Both learned of the changes about the same time as UPMC posted a brief public statement to its website. UPMC said it notified the Department of Insurance and Highmark of its revised plans.

Shapiro said UPMC continued to “violate our state laws, and they fire off a couple of press releases and claim that they’re going to make changes.”

“Not only have we gotten nothing signed,” Shapiro said, “what they’re proposing is not even the bare minimum of what our charities law require.”

UPMC said it was Highmark that never formally asked for Hillman Cancer Center access. Spokesman Paul Wood attributed the change to a flood of calls from Highmark members and productive talks during a Thursday morning meeting at the U.S. Steel Tower in Downtown Pittsburgh among CEO Jeffrey Romoff, Pittsburgh Mayor Bill Peduto and Allegheny County Executive Rich Fitzgerald.

Public pressure has been mounting for UPMC to at least drop the prepay rule announced in October. This past week, U.S. Sen. Bob Casey disclosed communication he had on the issue with U.S. Health and Human Services Secretary Alex Azar.

UPMC officials did not cite federal intervention nor Shapiro’s case as the reason for the changes.

The showdown

On Monday, the first day of the non-jury trial, attorneys from Highmark will join Shapiro’s team in presenting evidence and calling up several witnesses — including former state insurance and public health officials involved in designing the 2014 consent decree.

The compromise aimed to ease the transition for consumers after Highmark and UPMC refused to agree on a contract. The dispute dates to Highmark’s 2012 acquisition of the former West Penn Allegheny Health System to form the basis of Allegheny Health Network.

UPMC said it wouldn’t contract with an organization that owns competing hospitals.

Shapiro and Highmark will argue in court that a broad modification provision folded into the state-mediated decree allows any party involved to seek changes in the name of public interest.

On Tuesday, UPMC will present its counter evidence and witness testimony, including UPMC’s Chief Legal Counsel Thomas McGough, former Insurance Commissioner Michael Consedine and former state Health Secretary Michael Wolf.

UPMC says the state has no right to change the June 30 end date and that its executives never would have signed the agreement five years ago had they known its expiration could ever be extended.

Judge Robert E. Simpson has said he plans to issue a ruling by Friday.

That will leave just two weeks for the losing party to try to appeal or achieve further recourse before the June 30 network split.

On the prepay issue, UPMC maintains that it has no obligation to offer nonemergency treatment to Highmark patients after June 30 and that it is making an “accommodation” by allowing Medicare Advantage and Hillman Cancer Center patients to do so.

Highmark’s commercial market patients not receiving oncology care at Hillman Cancer Center still will be subject to the controversial prepay rule as of July 1 at most UPMC hospitals and specialty centers — including UPMC Magee-Womens Hospital, UPMC St. Margaret and UPMC Monroeville. Exceptions include Western Psychiatric Institute, Children’s Hospital of Pittsburgh and hospitals in rural areas.

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