UPMC-Highmark Split: State Seeks To Extend Agreement That Provides Patients Access To Each System

Jun 10, 2019

Pennsylvania Attorney General Josh Shapiro wants a judge to require UPMC to keep accepting Highmark health insurance under a deal set to expire this month.

The attorney general's office began a two-day hearing in Commonwealth Court Monday.

The debate centers on whether a single clause in a 2014 consent decree gives the state the right to extend the duration of that agreement.

Without it, people with Highmark insurance would face sky-high costs if they sought services with UPMC.

Executive Deputy Attorney General Jonathan Scott Goldman began opening arguments to Commonwealth Court Judge Robert Simpson. Goldman said all parties, including UPMC, were "sophisticated parties" with "competent counsel," and all parties agreed to the decree.

UPMC counsel Lee DeJulius said that wasn't the case. UPMC saw the consent decree as "a transition with a clear ending."

"The contract shall be five years," he said, pointing to notes written by UPMC during negotiations. "Not 'may be.' Not 'at least.' Shall be five years."

DeJulius said the modification provision was tacked on at the last minute without UPMC's involvement.

Pennsylvania Executive Deputy Attorney General James Donahue III was the commonwealth's first witness. Donahue was involved in the 2014 negotiations.

He said the decree was set up on the principle of "unavoidable contacts" -- the idea that people in need of emergency services, oncology and other key services couldn't help but rely on UPMC, and should have access to in-network care.

That's especially true for "children, the poor and the elderly," Donahue noted, saying there was concern that "it could kill somebody or bankrupt somebody" if UPMC and Highmark carried their dispute too far.

Donahue's testimony, and a raft of emails shown as exhibits, revisited a time when UPMC and Highmark were mandated to develop the consent decree, despite being unwilling to set foot in the same room together. Responding to questions from Attorney General's office Attorney Keli Neary, Donahue recalled that the state acted as a "shuttle diplomacy" between the two health systems.

"The biggest issue was that UPMC would not sit with Highmark, would not be in the same room with Highmark, and wouldn't share the same documents with Highmark," he said.

UPMC Attorney Steve Cozen, cross-examining Donahue, pointed to other instances in the consent decree where the state sought specific extensions as examples of what it could have done to ensure the option to extend the agreement.

"But you didn't," Cozen said.

Testimony at the hearing recounts an era of acrimony between UPMC and Highmark that spiked when Highmark acquired the struggling West Penn Allegheny health system and UPMC dropped Highmark insurance holders from its network. The seocnd witness, Highmark executive and Chief Legal Counsel Thomas Vankirk, at times sparred with Cozen over what happened during the 2014 negotiations.

Tuesday will continue the hearing with UPMC calling witnesses and presenting its case.

Attorney General's spokesman Joe Grace noted, win or lose, the AG plans to continue with a lawsuit alleging UPMC is violating the rules as a charitable organization.

"No matter what happens this week, we're not going away," Grace said.

This story was updated on 6/10/19 at 9:22 pm.