AG sues UPMC over patient access

Shapiro criticizes organization’s actions in duel with Highmark

The state attorney general on Thursday accused UPMC of violating state law in its ongoing duel with Highmark, petitioning Commonwealth Court to force the health care organization to come to terms with its rival to guarantee that Highmark subscribers will continue to have access to UPMC hospitals.

Attorney General Josh Shapiro filed the petition in advance of the June 30 expiration of a state-brokered consent decree that is meant to guarantee access for Highmark subscribers to UPMC facilities. The expiration could worsen the alleged access problems unless the court intervenes, according to Shapiro.

The expiration of that 2014 consent decree doesn’t apply to UPMC Altoona and UPMC Bedford Memorial, however, as both are sole community providers, access to which is guaranteed by a separate agreement with five more years to run — nor does it apply to UPMC Children’s or Western Psychiatric hospitals, access to which is protected by two additional agreements.

During the battle with Highmark, UPMC has violated public charities law, the nonprofit corporation law and the Unfair Trade Practices and Consumer Protection Law by creating obstacles for Highmark subscribers accustomed to UPMC medical care, causing confusion and worry, according to Shapiro.

UPMC didn’t answer the accusations directly, but it argued that any perceived problems have been caused by a failure to adjust to what is actually an improved overall situation.

“The five-year transition … has allowed businesses and consumers substantial time to prepare for the end of the UPMC-Highmark relationship,” stated UPMC spokes­man Paul Wood. “During that period, the region’s insurance marketplace transformed from one of the nation’s most highly concentrated and least competitive to one of the most competitive and pro-consumer markets in the nation with some of the lowest cost health plans available anywhere.”

Consumers have benefited, according to Wood.

“Nearly all businesses now offer alternative, affordable plans so their employees can choose insurance products that allow them full, unfettered in-network access to the UPMC hospitals and physicians they desire,” he said.

Highmark supports Shapiro’s efforts, stated CEO David Holmberg.

“Vital community assets (meaning UPMC’s) must be available for the public good, Holmberg stated on a conference call.

In a show of “corporate greed,” and despite enormous tax benefits conferred by its status as a nonprofit public charity, UPMC has violated its charitable “mission” by requiring out-of-network patients to pay all estimated charges upfront before treatment for non-emergency services, according to Shapiro.

Under the consent decree, UPMC agreed that Highmark subscribers would pay no more than 60 percent of charges when UPMC care was out-of-network, according to the petition.

But UPMC has “thwarted” the efforts of self-insured patients” to take advantage of that, resulting in UPMC’s “unjust enrichment through excess reimbursements,” Shapiro said.

As a result, one patient had to change hospitals to get needed surgery in-network to avoid an $11,000 fee, he said.

UPMC has also violated its charitable mission by refusing to contract with employers that have agreements with a competing provider — closing off a doctor practice it owned in Williams­port to an employer’s Highmark subscribers, because the employer didn’t have a contract with a nearby UPMC hospital, according to Shapiro.

Access to seniors

UPMC violated the Consumer Protection Law by creating confusion among Highmark’s Medicare Ad­vantage subscribers with threats not to provide them access after June 30, despite “prior representations to the public and the Commonwealth that seniors would never be affected by its contractual disputes with Highmark,” Shapiro said in the petition.

Seniors actually have more options for lower prices and plan designs than they formerly had, according to UPMC’s Wood.

Moreover, seniors with Medicare Advantage plans have from Jan. 1 through March 31 to switch their coverage “so they have the in-network access to the providers they prefer,” Wood said.

The benefits of being a public charity include $40 million worth of property tax exemptions from the city of Pittsburgh, Allegheny County and the Pittsburgh School District, Shapiro said.

They also include the tax-deductible enticement that led to $1.27 billion in public and private contributions and grants received between 2005 and 2017, he said.

He acknowledged that UPMC provides lots of charitable care, lots of beneficial employment and lots of “community engagement.”

But that’s offset by its “behaving like a for-profit,” with enormous executive salaries, occupation of high-cost office space in Pittsburgh and “inexcusable harm” to patients, he said.

The organization needs to be held accountable for not fulfilling all its charitable obligations, Shapiro said.

AG: Extend decree

Shapiro asked the court to extend the consent decree indefinitely, to ensure that UPMC lives up to its charitable obligations and that it doesn’t engage in “excessive, unreasonable billing.”

He also asked the court to order arbitration if negotiations break down between insurers and providers, to ensure continued access to all health care facilities.

“Absent the intervention of this court, nothing will prevent UPMC from refusing to contract with any other health care insurer in the future such that only subscribers to the UPMC Health Plan will have In-Network access to UPMC’s pro­viders,” the petition stated.

That outcome would ultimately alter the public’s overall costs of health care, the petition stated.

The battle between UPMC and Highmark began around 2011, when UPMC, mainly a provider of services, but with an insurance arm, couldn’t come to terms with Highmark, which was strictly an insurer, for access to UPMC facilities.

Highmark responded by purchasing Allegheny General Hospital, becoming an integrated health care system like UPMC.

While UPMC is looking for competition in which patients choose one integrated network or another for both insurance and health care services, Highmark is looking for competition that offers a choice of providers, regardless of which insurance company a patient picks at first.

“We welcome working with all health care providers,” said Highmark’s Holmberg. “We believe that all health plans and health systems should compete based on their value to the consumer.”

In recent negotiations to modify the consent decree, Highmark agreed to the state’s proposals, Shapiro said.

UPMC did not, he said.

“The bottom line is, you have to follow Pennsylvania law,” Shapiro said. “UPMC did not.”

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