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State's Top Court Hears Arguments On UPMC/Highmark Split

Keith Srakocic
Cancer patient Judith Hays, left, stands with Pennsylvania Attorney General Josh Shapiro, right, at a news conference announcing legal action in the dispute between health insurance providers UPMC and Highmark.

The Pennsylvania Supreme Court heard oral arguments on Thursday on whether to extend a consent decree that would force UPMC to continue taking Highmark insurance.

The legal debate focused on whether state Attorney General Josh Shapiro could use a modification provision in the decree itself to extend it beyond its June 30 end date.


J. Bart DeLone, who represented Shapiro, urged the justices to consider the public good in interpreting the agreement. "We're not dealing with ordinary commercial businesses," he said. "We are here to look out for consumers and patients."


The decree was signed in 2014, two years after UPMC announced it would stop contracting with Highmark, which caused the state government to intervene.


Many people are worried that when the decree ends, patients will lose access to health care.  To prevent that, Shapiro filed a February lawsuit. It alleges that that UPMC, western Pennsylvania’s largest hospital network, is abusing its nonprofit status by refusing to accept Highmark insurance. 


DeLone said that the decree's modification provision "was very broad" — an argument echoed by Kim Waterson, representing Highmark. The insurer, and UPMC rival, supports extending the decree. 


But UPMC attorney Leon DeJulius disagreed. The modification provision, he argued, was intended simply to acknowledge potential changes in the complex world of healthcare.


DeJulius said that the termination date was a "fundamental part of the agreement," whose express purpose was to "resolve the dispute [between Highmark and UPMC] for a period of five years." Extending the life of the decree, he said, went beyond dictionary definitions of the word "modification."


"You have to look at the contract as a whole," he added. "You cannot use one provision to nullify another." 


That argument dovetailed with last month's ruling from the state's Commonwealth Court, which the attorney general appealed to the high court.


Judge Robert Simpson held that he didn't have the legal power to compel UPMC to continue accepting Highmark coverage, as the expiration date "is an unambiguous and material term of the Consent Decree."


On Thursday, however, Justice David Wecht didn't seem quite so sure.


"There seems to be no bright line [about] how much change ... is too much change" when it comes to which modifications are acceptable, he said.  


Shapiro is seeking to have the court guarantee that people with Highmark insurance can continuing seeing their UPMC providers at in-network rates until the broader lawsuit is resolved.


The justices must deliver a ruling before the end of June if they want to extend the consent decree. 


WESA receives funding from Highmark and UPMC.