Attorney General Takes On UPMC, Highmark Over Patient Access

Feb 7, 2019

Pennsylvania Attorney General Josh Shapiro sued Thursday in an effort to keep health giant UPMC from ending its business relationship with rival Highmark Health, in hopes of preventing higher costs from hitting about 70,000 western Pennsylvania patients.

He asked Commonwealth Court to forestall developments expected July 1 that would leave some Highmark insurance customers facing higher fees or looking for new doctors.

 

UPMC has sought to stop accepting Highmark insurance since 2012. That year Highmark acquired medical provider Allegheny Health Network. This association put Highmark in direct competition with UPMC which at that point was the only health organization in western Pennsylvania providing both insurance and medical care.

In 2014 the state stepped in to make sure Highmark patients had access to certain UPMC services, like the children’s and cancer specialty hospitals. Though the consent decree expires this summer.

The 73-page petition to modify consent decrees seeks to enforce Pennsylvania laws about fundraising for charity, nonprofit corporations and consumer protections. It aims to modify and indefinitely extend 5-year-old consent agreements that have kept some Highmark Medicare Advantage members and others with in-network rates for UPMC services. 

"I can't sit idly by and watch our seniors and children and workers suffer because of corporate greed," Shapiro, a Democrat, said in a news conference at his Pittsburgh offices.

The attorney general's office wants the court to impose a single, modified consent decree that would continue the business relationship between UPMC and Highmark, both based in Pittsburgh, two of Pennsylvania's largest charitable institutions. Shapiro said he’s only acting against UPMC because while Highmark is willing to compromise, UPMC is not.

UPMC is a non-profit that benefits from tax-exempt status. Shapiro said that means UPMC is legally obligated to provide affordable health care “through negotiated contracts with any health plan,” and therefore excluding a major insurance carrier is antithetical to that.

 

“Understand this is a give and take relationship between UPMC and Pennsylvania tax payers,” he said. “UPMC is simply taking more than its fair share from Pennsylvanians.”

Highmark Health chief executive David Holmberg said a modified agreement would be in the community's best interest.

"We've always believed that a level playing field should exist among health insurance companies and health care providers," Holmberg said.

In an emailed statement from Paul Wood, UPMC’s chief communication’s officer, said the competition with Highmark has increased health care options which benefits consumers.

 

“The five-year transition as provided for by the Consent Decrees expiring June 30, 2019 has allowed businesses and consumers substantial time to prepare for the end of the UPMC-Highmark relationship in western Pennsylvania,” said Wood. During that period, the region’s insurance marketplace transformed … to one of the most competitive and pro-consumer markets in the nation with some of the lowest cost health plans available anywhere.”

Highmark officials said that if the agreements expire as scheduled on July 1, nearly 70,000 customers in the Pittsburgh area and Erie will find themselves out of network, hit with higher costs for UPMC services or needing to find new doctors.

"These are hospitals that were built for the community by taxpayer dollars, by community contributions, and the very people who paid for them will not be able to access them," Highmark spokesman Aaron Billger said Thursday.

Shapiro said UPMC has not been living up to its obligations as a public charity, a status that gives it protection from taxes. The attorney general's petition accused UPMC of wasting charitable assets through "exorbitant executive salaries and perquisites in the form of corporate jets and prestigious office space waste."

He wants the court to "enable open and affordable" access to UPMC services through contracts with any health plans, to require arbitration when talks between insurers and providers fail, and to prohibit "excessive and unreasonable" billing practices by UPMC.

The business relationship between UPMC and Highmark was about to end when the administration of Republican Tom Corbett, the governor at the time, engineered the five-year consent decrees between the companies and the attorney general's office in 2014 that kept in-network rates for Highmark customers in the Pittsburgh area and Erie.

A main objective of those agreements was to protect vulnerable patients — children, older people and poor people — with Highmark insurance from suddenly being unable to get treatment through UPMC's extensive network of hospitals, doctors and other medical providers.

UPMC had been opposed to renewing their agreement in 2012 after Highmark had purchased what is now Allegheny Health Network and became a UPMC competitor in providing health services as well as in insurance coverage.

The Associated Press' Mark Scolforo contributed to this report.

WESA receives funding from UPMC and Highmark.