Health care giant UPMC struck back at the Pennsylvania attorney general late Thursday, accusing him in a nine-count civil lawsuit of “illegally taking over nonprofit health care” in the state.
The federal court lawsuit, which seeks class-action status, came in response to a petition that Attorney General Joshua Shapiro filed Feb. 7 in Commonwealth Court seeking to force UPMC into contracting with all health insurers while meeting its charitable obligations as a nonprofit medical institution.
The attorney general’s attempt to amend agreements governing the wind-down of relations between Pittsburgh’s two largest health care operators, Highmark and UPMC, is unconstitutional, according to UPMC’s court filing.
“This illegal scheme fundamentally changes the law,” UPMC said in the lawsuit. “General Shapiro’s assertion of ‘vast’ power over nonprofits also violates the United States Constitution.”
Among the claims in UPMC’s lawsuit, which was filed in U.S. District Court for the Middle District, was that the attorney general targeted UPMC affiliates for enforcement while ignoring other health care providers in the state, which violates equal protection under the law.
The lawsuit said that, at a November meeting in Harrisburg with UPMC officials, Mr. Shapiro asserted that he has “vast authority over all Pennsylvania nonprofit entities,” and nonprofit health plans must contract with any health care provider seeking a commercial or Medicare Advantage agreement.
Also at the meeting, UPMC claims it was told by Mr. Shapiro that nonprofit health care entities are prohibited from terminating a contract without cause or increasing charges when a medical service is provided in a hospital instead of a doctor’s office, where it could be done at a lower cost.
In a statement late Thursday, Mr. Shapiro criticized UPMC for wasting valuable resources instead of focusing on its nonprofit charitable mission.
“We seek a resolution that protects patients — not a continuation of the protracted conflict and bickering that has impacted Western Pennsylvania for many years,” Mr. Shapiro said. His office “was not intimidated by these court filings and [we] look forward to making our case on behalf of health care consumers who are getting an unfair deal from UPMC.”
As the war of legal filings continues, UPMC is also seeking a preliminary injunction to keep the attorney general from forcing the health system into complying with any of what it described as Mr. Shapiro’s rules for nonprofits — including contracting with all insurers, regardless of payments received for the care.
Such arrangements would force UPMC to accept payments for services that may be insufficient to cover costs and may violate federal law, according to the health system’s filing.
For his part, the attorney general earlier this month had accused the Pittsburgh-based hospital giant of violating the state's public charities law by restricting access to its doctors and medical facilities. In addition, he said he wanted to protect against UPMC’s “unjust enrichment” by prohibiting unreasonable billing practices, which are inconsistent with its charitable mission.
Mr. Shapiro’s petition seeks to amend a 5-year-old consent decree brokered by the state that allows some people with Highmark health insurance to continue seeing UPMC doctors only until July 1. The deadline has left many Highmark members looking for other doctors.
Relations between UPMC and Highmark, which had long worked together in the Pittsburgh region as a health care provider and an insurer, broke down in 2011 when Highmark decided to buy the former West Penn Allegheny Health System and create a direct competitor to UPMC, which also offers health insurance and medical care.
The attorney general's office said in its earlier court filing that it had been working for two years to attempt to get Highmark and UPMC to modify the consent decrees governing their breakup. When the AG's office gave Highmark and UPMC a formal proposal for modifying the agreement last year, Highmark accepted the changes but UPMC did not.
In a separate but related matter, UPMC filed a federal court petition Thursday to intervene in a class-action Alabama lawsuit brought by consumers against Highmark, Blue Cross Blue Shield Association and Blues insurance plans across the country.
The antitrust lawsuit claims that Blues plans deny contracts to some health care providers including UPMC, restricting Blues plan members from outside the region from seeking care at UPMC hospitals.
Kris B. Mamula: kmamula@post-gazette.com or 412-263-1699
Updated at 7:40 p.m. Feb. 21, 2019
First Published: February 21, 2019, 10:37 p.m.
