UPMC-Highmark split: State seeks to extend agreement that provides patients access to each system
Cancer patient Judith Hays, left, stands with Pennsylvania Attorney General Josh Shapiro, right, at a news conference announcing legal action in the dispute between health insurance providers UPMC and Highmark. (Keith Srakocic/AP)
Pennsylvania Attorney General Josh Shapiro’s office and University of Pittsburgh Medical Center have begun two days of court hearings as the state seeks to extend an agreement allowing people with UPMC or Highmark Health insurance to access one another’s services in-network.
The agreement is set to expire June 30. If it does, people would be left without coverage.
The consent decree was negotiated in 2014 by the office of then-Attorney General Kathleen Kane, and the state departments of health and insurance. At issue is whether UPMC agreed to a “modification provision” that would give the state the option to extend the agreement.
Executive Deputy Attorney General Jonathan Scott Goldman began opening arguments to Commonwealth Court Judge Robert Simpson. Goldman said all parties to the agreement, including UPMC, were “sophisticated parties” with “competent counsel,” and all parties agreed to the decree.
UPMC counsel Lee DeJulius said that wasn’t the case. UPMC saw the consent decree as “a transition with a clear ending.”
“The contract shall be five years,” he said, pointing to notes written by UPMC during negotiations. “Not ‘may be.’ Not ‘at least.’ Shall be five years.”
DeJulius said the modification provision was tacked on at the last minute without UPMC’s involvement.
Pennsylvania Executive Deputy Attorney General James Donahue III was the commonwealth’s first witness. Donahue was involved in the 2014 negotiations.
He said the decree was set up on the principle of “unavoidable contacts” – the idea that people in need of emergency services, oncology and other key services couldn’t help but rely on UPMC, and should have access to in-network care.
That’s especially true for “children, the poor and the elderly,” Donahue noted, saying there was concern that “it could kill somebody or bankrupt somebody” if UPMC and Highmark carried their dispute too far.
Donahue’s testimony, and a raft of emails shown as exhibits, revisited a time when UPMC and Highmark were mandated to develop the consent decree, despite being unwilling to set foot in the same room together. Responding to questions from Attorney General’s office Attorney Keli Neary, Donahue recalled that the state acted as a “shuttle diplomacy” between UPMC and Highmark.
“The biggest issue was that UPMC would not sit with Highmark, would not be in the same room with Highmark, and wouldn’t share the same documents with Highmark,” he said.
UPMC Attorney Steve Cozen cross-examined Donahue. Cozen pointed to other instances in the consent decree where the state sought specific extensions as examples of what it could have done to write an extension in to the rules.
“But you didn’t,” Cozen said.
Testimony at the hearing recounts an era of acrimony between UPMC and Highmark that began when Highmark acquired the struggling West Penn Allegheny health system, and UPMC dropped Highmark insurance holders from its network.
This is a developing story. Check back later for more.