Highmark members will lose in-network access to University of Pittsburgh Medical Center hospitals and physicians on June 30, a Pennsylvania Commonwealth Court judge affirmed Wednesday.
The ruling reinforced a state Supreme Court decision that will end the five-year consent decree between UPMC and Highmark this summer. While the court rejected Pennsylvania Attorney General Josh Shapiro's request to indefinitely extend the contract, the attorney general plans to appeal the ruling that also left other aspects of the case up for debate.
"Because the OAG does not plead fraud, accident or mistake, this court lacks the power or authority to modify the termination date of the consent decree without the consent of the parties, even if it were in the public interest to do so," Judge Robert Simpson wrote in the opinion.
The ruling declined to rule on UPMC's claim that the attorney general's office does not have the power to regulate not-for-profit entities. It also didn't address allegations of unfair trade practices and UPMC violating its charitable obligations.
UPMC said in a statement that it agreed with the ruling while Highmark said that the decision was "clearly a loss for UPMC. We continue to support the Pennsylvania attorney general's efforts, as they are in the best interest of the community."
The attorney general's office said that the court ruled in its favor on three of four issues and denied objections raised by UPMC. It ruled that the expiration date could not be extended, but not that such a modification was barred, the office said. Simpson followed a June 2018 Pennsylvania Supreme Court decision regarding Medicare Advantage beneficiaries that reaffirmed the June 30 termination as "unambiguous and material."
Regarding the end of the consent decree, which the attorney general asserts will harm the public as UPMC "forsakes its charitable obligations in pursuit of commercial success," Shapiro will appeal the ruling to the Supreme Court.
"As this complex legal process plays out, Attorney General Shapiro will continue fighting for the best interest of patients, payers and the public in western Pennsylvania and uphold their access to the healthcare facilities they have contributed to building," the attorney general's office said in a statement.
In 2002, UPMC reached a 10-year agreement to cover Highmark members. In 2011, the Pittsburgh-based integrated health system said it would not renew the deal, citing Highmark's proposed affiliation with West Penn Allegheny Health System, a competing integrated provider. A mediated agreement provided, among other things, that Highmark's Medicare Advantage members would have in-network access to all UPMC hospitals and physicians until Dec. 31, 2014.
In 2013, the Pennsylvania Insurance Department approved Highmark's affiliation with West Penn, which eventually turned into the eight-hospital Allegheny Health Network. The already strained relationship between UPMC and Highmark "deteriorated precipitously" from there and the parties agreed to an exit strategy. Both have since grown steadily.
In February, the attorney general tried to extend the consent decree and ensure fair negotiations, citing the negative impact on Pennsylvania residents. Shapiro said that since UPMC saves almost $40 million in property taxes annually as a charitable, tax-exempt entity, it "must behave in a manner consistent with its charitable mission in all facets of its operation. ... Right now the taxpayers aren't receiving a fair deal."
