Top court hears arguments in UPMC case

Ioannis Pashakis//May 16, 2019

Top court hears arguments in UPMC case

Ioannis Pashakis//May 16, 2019

In arguments before the Pennsylvania Supreme Court on Thursday, an attorney for UPMC said it is not possible to extend a consent decree between the health system and insurer Highmark, despite efforts to make the agreement last longer.

Pennsylvania Attorney General Josh Shapiro has been trying to extend the five-year consent decree, which expires in June and essentially requires UPMC to accept people with Highmark insurance.

Shapiro lost a round in Commonwealth Court but appealed the ruling to the state Supreme Court. He is arguing that a provision in the decree allows for its modification, either by the parties to the decree or by a court.

That argument was refuted by an attorney representing Pittsburgh-based UPMC, Leon DeJulius Jr., partner-in-charge at Jones Day law firm in Pittsburgh.

DeJulius noted that the decree does have a provision allowing for its modification, but it was designed to ensure the the agreement could keep up with changes in law, not to extend it. The decree took effect in 2014 under a previous attorney general.

“The attorney general asked for an extension provision to the decree that was rejected,” DeJulius said. “When he sent it back it had a five-year term. That was the deal. What he’s seeking to do now is not a modification; it is wiping out the consent decree and saying ‘put this instead.’”

DeJulius also noted that UPMC entered into the decree with Highmark on the understanding that the agreement would allow for a transition period for the two entities.

In 2013 UPMC announced that it would be terminating contracts with Highmark after the insurer acquired Allegheny Health Network, a rival health system. UPMC and Highmark entered into the consent decree so that people insured by Highmark would not immediately lose access to UPMC providers.

Shapiro has claimed that that by ending its relationship with Highmark, UPMC is not living up to its obligations as a nonprofit entity. His office required modifications to the consent decree that would have continued the relationship between Highmark and UPMC. Highmark agreed to the modifications; UPMC has not.

“We are here to look out for consumers and we are also here to make sure UPMC complies with their charitable mission,” Bart DeLone, a lawyer in the attorney general’s office, said during the Supreme Court hearing on Thursday. “The hope was that these public charities would act more as public charities. Highmark has done that.”

The state’s trade group for health systems – the Hospital and Healthsystem Association of Pennsylvania – is concerned that a ruling against UPMC would essentially force hospitals to accept all insurance plans, undercutting their ability to negotiate rates.

There is no timeline for a ruling from the court, according to a spokesperson with the Pennsylvania Supreme Court.