Attorney General Josh Shapiro Takes Legal Action Against UPMC

Shapiro says UPMC has violated their consent decree with UPMC and state charities laws

Shelby Cassesse
February 07, 2019 - 5:12 pm

PITTSBURGH (Newsradio 1020 KDKA) - Attorney General Josh Shapiro filed a petition in Commonwealth Court Thursday to modify the consent decrees that govern the relationship between UPMC and Highmark.

The decrees, which the two companies entered into in 2014, expire June 30 of this year. They require UPMC and Highmark to work together. Specifically, UPMC is required to treat all emergency room patients and patients at certain rural UPMC facilities as in network, as well as use last, best-offer arbitration for contract negotiations. 

Shapiro says a legal review found that UPMC was violating many of these terms.

"UPMC continues to engage in conduct that is in violation of those legal obligations, and they are making very troubling pledges to deny care going forward."

The legal review found that UPMC was withholding access to doctors for patients in Williamsport, Pa. whose employers have contracts with a competing health plan. UPMC also refused to negotiate reasonable payment terms with self-insured employers.

The proposed modifications, which would likely continue a relationship between UPMC and Highmark past the June expiration date,  include enabling open and affordable access to UPMC services and products through negotiated contracts with any health plan, requiring last, best-offer arbitration when contract negotiations between insurers and providers fail and prohibiting excessive and unreasonable billing practices. They were presented to the two companies in 2018.

According to Shapiro, Highmark accepted the modifications, while UPMC did not, leading Shapiro to file the petition against UPMC.

"UPMC could still change its mind. They can still do the right thing and agree to these modifications, but until then, I have no choice but to act to protect Pennsylvanians." 

Because UPMC operates as a public, non-profit charitable institution, it receives tax benefits, donations and public funding in exchange for legal responsibility to perform services deemed valuable to the public at large. 

Shapiro says withholding access to care based on a patient having a competing health plan is in violation of their charitable mission.

"Pittsburghers have essentially paid not to get care. Think about it for a second. They pay their local, county and state taxes. They pay to subsidize for the taxes that UPMC doesn't pay. They then pay through their employer for their Highmark health insurance. Then, if they want to take their child to a doctor at a UPMC facility, they have to pay extra just to walk in the very hospital that their taxes help build. That's outrageous, and that's not fair." 

UPMC saves almost $40 million annually due to these tax benefits and received $1.27 billion in private and public contributions between 2005 and 2017.