Healthcare Business News

UPMC sues over Pittsburgh's move to challenge system's tax breaks

By Melanie Evans
Posted: April 19, 2013 - 7:45 pm ET

UPMC, a not-for-profit health system with its tax-exempt status under attack, is fighting back with a lawsuit against its hometown and mayor.

The health system's lawsuit, filed in the U.S. District Court in the Western District of Pennsylvania, alleges the city of Pittsburgh and Mayor Luke Ravenstahl violated UPMC's right to due process and equal protection when they filed suit in March to challenge UPMC's tax breaks. The health system also argues it was illegally singled out and that the tax challenge infringed on its right to pursue business across state lines and internationally. The city claimed UPMC's international businesses are not “in the best interests of the local region and its patients,” according to the system's lawsuit.

A spokesman for the city was not available at deadline.

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Ravenstahl in late March announced the city would sue UPMC for payroll and property taxes and the mayor released a report that called the health system's free care for low-income patients “insubstantial” while executives were paid too much. Free care for low-income patients totaled 1.7% to 3.6% of the health system's revenue, the report said, which also claimed UPMC closed services in uninsured communities.

Jeffrey Romoff, UPMC's president and CEO received $5.95 million in 2011, the most recent public data show. For the year that ended last June, UPMC reported $6.6 billion in revenue and income of $277 million.

“The lawsuit was filed and announced publicly in a manner intended and designed to malign the reputation of UPMC, its supported organizations, and its executive management, and to subvert all pending and future tax assessment processes involving UPMC and its supported organizations,” UPMC said in its lawsuit.

The report, meanwhile, was confidential and its public release violated the state's Local Taxpayer Bill of Rights Act, UPMC claimed.

Follow Melanie Evans on Twitter: @MHmevans

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