Pittsburgh-based UPMC must continue to provide in-network services to members of Highmark's Medicare Advantage plans per the terms of an earlier agreement signed by the two feuding organizations, a Pennsylvania judge ruled Friday.
UPMC has already said it plans to appeal the decision to the Pennsylvania Supreme Court.
UPMC announced in April that it planned to end its Advantage contracts with Highmark at the end of the year, saying Highmark had failed to pay UPMC contracted rates for cancer care. That announcement spurred criticism from Pennsylvania Attorney General Kathleen Kane and Pennsylvania Gov. Tom Wolf, who said ending the contracts would violate the terms of a consent decree reached between Highmark and UPMC in 2014.
The state took UPMC and Highmark to court over the matter, and President Judge Dan Pellegrini ruled Friday that UPMC must remain an in-network provider for Highmark's Medicare Advantage plans through the term of the consent decree, which expires in 2019. More than 180,000 Pennsylvania seniors are part of those plans.
The judge also said UPMC and Highmark must go to arbitration if they can't resolve several other outstanding issues. Pelligrini also forbade Highmark and UPMC from making changes to any plan, contract or other business relationship between the two “no matter how small, without first securing approval from the court.”
Paul Wood, a UPMC spokesman, issued a statement Friday calling the decision “wrong both as a matter of fact and law."
The court “erroneously reinterpreted the plain text of the language of the consent decree to render an arbitrary and capricious order that far exceeds its jurisdictional authority and prejudicially contrived a solution that ignored the evidence presented,” Wood said.
He added that the judge “put the entire business relationship between UPMC and Highmark under his direct supervision” despite no such request from the state to do so. Wood said the judge does not have authority to “assume control of healthcare in Western Pennsylvania.”
Wood said UPMC would appeal the matter to the Pennsylvania Supreme Court immediately and is confident that court would find in its favor.
Highmark spokesman Aaron Billger, however, said in a statement Friday that the judge's decision validates the consent decrees' protection for seniors in its Medicare Advantage plans. The judge also found that Highmark did not “take the position that it had the authority to unilaterally revise the rates and fees payable to UPMC.”
UPMC had alleged that Highmark stopped paying UPMC contracted rates for cancer care and owed the system $143 million. The consent decree, UPMC argued, allowed it to end its contracts under such circumstances. Highmark, however, said it refused to follow irrational billing practices in an effort keep care affordable.
Highmark and UPMC have been feuding since Highmark, the largest health insurer in the region, acquired a rival health system—now called Allegheny Health Network—in 2013. A contract between them expired at the end of last year, and a transition plan approved by the Pennsylvania Insurance Department outlined which UPMC facilities and services would be in-network and out-of-network after the contract's expiration. That followed a consent decree signed in June outlining similar measures.
Pennsylvania's governor praised the judge's decision Friday.
“UPMC's decision to cancel Medicare Advantage for over 180,000 seniors was wrong, and today I am pleased that the Commonwealth Court ruled in favor of protecting seniors,” Wolf said in a statement. “The feud between these two companies must end—the people of Western Pennsylvania have had enough.”