AG won’t object to UPMC takeover

State Attorney General Kathleen Kane announced Tuesday she won’t object formally to UPMC’s acquisition of Altoona Regional Health System, but she will require UPMC to cut a deal with Highmark to allow its subscribers access to the hospital.

“The public, in a sense, paid for the hospitals in the Altoona area through their charitable donations and the tax breaks those facilities received,” Kane stated in a news release. “If segments of the public were to be shut out from some hospitals, simply because big companies are in a battle for market share, that would be highly unfair.”

UPMC – which doesn’t plan to extend its contractual relationship with Highmark after 2014 in the Pittsburgh area – said previously it would seek a special contract extension with Highmark for access to Altoona, because Altoona is a sole community provider.

But officials said that extension had to be reasonable – leaving open the possibility that a deal wouldn’t get done.

Kane said that’s not an acceptable alternative.

“These parties need to bargain with each other in good faith,” she stated in the news release. “If Highmark and UPMC cannot work out a contract for the Altoona Regional Health System, [the AG’s office] will consider all options to guarantee the public’s access.”

In response, UPMC said that it will “continue to fully cooperate” with Kane.

Kane’s decision applies exclusively to UPMC Altoona, according to the AG news release.

However, Kane’s logic – based not on Altoona’s being a sole provider but rather on its being a community hospital – seemingly could apply to other UPMC assets, including those in areas with competing hospitals, like Pittsburgh and Erie.

“Charitable hospitals are community assets paid for by the public through donations, tax exemption subsidy and various government subsidies,” Kane stated in the news release. “Therefore all residents should have access to these facilities regardless of their insurance carrier.”

Neither the AG’s office nor UPMC commented on the potential for the decision to have access implications in the rest of UPMC’s territory.

But Highmark was emphatic:

“No health care organization or institution should be allowed to, or have the power to, shut off access for millions of people to facilities that are community assets,” stated Highmark spokesman Michael Weinstein in an email Tuesday. “Highmark Health Services stands ready to negotiate a multi-year agreement with UPMC to ensure that everyone has access to all UPMC facilities and physicians, at a reasonable cost, regardless of their insurance carrier.”

Weinstein, however, declined to comment specifically on whether he thought the AG’s Altoona decision would give Highmark more ammunition for its argument that UPMC shouldn’t be able to shut out Highmark in areas where there are alternative hospitals.

Kane’s decision pleased Paula Stellabotte, president of the SEIU Healthcare Pennsylvania local that represents UPMC Altoona’s registered nurses.

“Kane is listening to the concerns of area residents, and intends to hold UPMC accountable to offering affordable access [to UPMC Altoona],” Stellabotte stated in an email.

She also said Kane intends to hold UPMC accountable for providing access for Blair County residents “to all UPMC doctors and hospitals.”

It’s not clear Kane intended to go that far.

Kane, however, promised to monitor UPMC’s stewardship at Altoona, “in order to protect consumers and specifically to guarantee that the public has continued access.”

Any Highmark subscriber denied treatment at UPMC Altoona should contact her Health Care Section at 717-705-6938 or healthcare, she stated.

The news release didn’t mention traditional anti-trust issues per se.

Mirror Staff Writer William Kibler is at 949-7038.