A federal judge dismissed UPMC's lawsuit to block the Pennsylvania attorney general's efforts to force UPMC to keep its provider network open to Highmark Health and other health plans.
U.S. District Judge John Jones Wednesday that UPMC can't sue over Attorney General Josh Shapiro's statements about UPMC's provider network, since they have not led to action and his proposed rule is still under review in state court.
The dispute stems from Shapiro's attempts to require UPMC to continue making its network available to Highmark Health enrollees after a five-year consent decree between the two systems expires June 30. UPMC sued in the Commonwealth Court in February and called Shapiro's actions "anti-competitive," "irrational" and in violation of UPMC's federal due process rights.
The health system also sued in federal court seeking a declaration that Shapiro's proposed modifications to the consent degree were preempted by the Medicare Act, the Affordable Care Act, the Employee Retirement Income Security Act and the Sherman Act.
The Hospital and Healthsystem Association of Pennsylvania sought to join UPMC's side in the suit, arguing that Shapiro's plan would potentially force all not-for-profit hospitals in the state to do business with any insurer regardless of payment or other contract terms, which would destabilize hospitals financially. Jones rejected their request because he dismissed the lawsuit.
Shapiro argued in Commonwealth Court that UPMC has violated its charitable obligations to the state. He wants the court to enable open and affordable access to UPMC's provider network through negotiated contracts; require baseball-style arbitration if negotiations fail; and bar UPMC from engaging in excessive and unreasonable billing practices. He also seeks to replace UPMC's and Highmark's boards.
Jones wrote that whether Shapiro intends or hopes to impose new obligations on UPMC and other not-for-profit hospitals does not answer the question of whether he actually has imposed those obligations or whether he is authorized to.
"Until the Commonwealth Court agrees to General Shapiro's proposed modifications to the 2014 consent decree or until General Shapiro actually acts, General Shapiro's proposed changes constitute no more than his stated intentions," Jones wrote. "General Shapiro's stated intentions are not binding law."
Shapiro's initial motion to extend the consent decree was shot down earlier this month by a Commonwealth Court judge who said the June 30 deadline should stand. But the Pennsylvania Supreme Court has agreed to take the case, and has scheduled arguments for next month.
These legal skirmishes are the latest moves in a bitter battle that began in 2011 when Highmark became UPMC's competitor in the Western Pennsylvania hospital market. The two powerful integrated systems have moved to establish exclusive plan-provider networks.
UPMC, which owns more than 30 hospitals and a health plan, objected to the attorney general's petition to extend the 2014 consent decree indefinitely. It said the five-year transition provided by the decree has allowed businesses and consumers adequate time to prepare for the end of the UPMC-Highmark relationship in Western Pennsylvania.
Highmark, which owns eight hospitals and a large health plan, backs Shapiro's proposal to extend the consent decree.
Highmark also supports applying the attorney general's proposed contracting rules to all not-for-profit providers in the state, and is committed to having its own hospitals negotiate in good faith with all health plans.
Shapiro alleged that UPMC has withheld access to its physicians in Williamsport for patients whose employers have contracts with a competing health plan and refused to negotiate reasonable payment terms with self-insured employers. In addition, he alleged UPMC requires out-of-network patients to pay all estimated charges up front and in full before receiving treatment for non-emergency services.