Regional News/Northeast: UPMC sues city of Pittsburgh and its mayor over tax-exempt status, and other news

PITTSBURGH—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 argued that 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. In March, Ravenstahl announced the city would sue UPMC for payroll and property taxes, and he released a report that characterized UPMC's executives as overpaid and its free care for low-income patients as “insubstantial.” 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.

—Melanie Evans

NEW YORK—The Hospital for Special Surgery established a genomics center to study and develop therapies for two autoimmune diseases—rheumatoid arthritis and lupus erythematosus. During the past 20 years, scientists have identified certain proteins associated with rheumatoid arthritis and lupus. Using a five-year, $5.6 million grant from the Tow Foundation, the Hospital for Special Surgery Genomics Center will expand upon that work in the search for better treatments for these diseases. “Our goals are to use genomic approaches to understand the regulation and function of disease-associated genes, understand how disease-associated genetic variants contribute to disease, and identify new genes associated with autoimmune diseases,” Dr. Lionel Ivashkiv, associate chief scientific officer at Hospital for Special Surgery and director of the new center, said in a release. “We will use this new knowledge to develop more effective and personalized therapies.” The center will include about 20 scientists, four genomics fellows, a computational biologist and a senior genomics researcher. For now, the focus will be limited to rheumatoid arthritis and lupus but may grow to include other autoimmune and musculoskeletal diseases. The Hospital for Special Surgery already has more than 30 rheumatologists on staff who care for approximately 2,600 rheumatoid arthritis patients and 300 lupus patients.

—Rachel Landen

HARTFORD, Conn.—The directors of Connecticut's public health insurance exchange are moving ahead with plans to launch the state's Small Business Health Options Program marketplace in October, despite the federal government's proposed delay of the program's full rollout until 2015. Access Health CT—a quasi-public agency commissioned in 2011 by the Connecticut Legislature to run the state's insurance exchange—announced that it selected New York-based HealthPass and Chicago-based Bswift to provide technology and administrative support for the state's SHOP exchange. Through the exchange's defined contribution model, small employers—defined as firms with 50 or fewer full-time workers—can provide their employees with access to a range of health benefit plans from multiple insurers. In March, HHS proposed delaying SHOP's full implementation until 2015, stating that it needed “additional time to prepare for an employee choice model and to increase the stability of the small group market while providing small groups with the benefits of SHOP in 2014.” Under the proposal, states whose exchanges are run in full or in part by the federal government could offer only one coverage option to small employers for the 2014 plan year, with a broader range of plans becoming available in 2015. States that have elected to run their own exchanges, including Connecticut, were given the option to do the same.

—Business Insurance