Judge denies UPMC’s attempt to block Highmark from hearing

Highmark’s attorneys will be allowed a seat alongside Pennsylvania Attorney General Josh Shapiro’s legal team during next week’s Commonwealth Court showdown with UPMC, a judge ruled Tuesday.

Highmark — which sides with Shapiro in his broader quest to force UPMC to contract with any willing competitor — seeks to testify in support of the Attorney General’s Office and against UPMC in an evidentiary hearing, scheduled to begin Monday morning in Harrisburg.

UPMC didn’t want its rival to participate in the newly scheduled hearing, calling Highmark a “nonparty” with competing and prejudicial interests that could add “confusion to the issue.”

Judge Robert E. Simpson denied UPMC’s request to bar Highmark from giving testimony and sharing evidence.

The Supreme Court teed up the trial with last week’s order that the attorney general be allowed to make his case regarding a critical dispute: whether the expiration of a 2014 state-brokered agreement between UPMC and Highmark can be extended — and with it, their insurance network split postponed.

UPMC says the June 30 end date cannot be changed.

Shapiro asserts his right to intervene via his office’s watchdog role over public charities, in the name of public interest and preserving affordable access to health care regardless of a patient’s insurance.

RELATED: Patients, activists urge lawmakers to halt UPMC-Highmark divorce

UPMC had argued that the 2014 agreement in dispute was made up of not one but two separate documents and contracts.

”That is flat wrong,” Highmark attorney Douglas E. Cameron fired back in a brief filed Monday. “Highmark played an active and central role in negotiating that comprehensive agreement.”

Same order, signed in different rooms

Because of the pair of health giants’ “intense acrimony” after years of bitter rivalry and legal battles, the attorneys representing UPMC and Highmark could not even be in the same room together when the agreement was inked five years ago.

Court records show that a mediator had to go back and forth to each set of attorneys in different rooms, in what the Attorney General’s Office “termed ‘shuttle’ diplomacy … whereby they would ferry offers and counteroffers back and forth between the parties.”

The final 2014 order, legally called the consent decrees, involved the signing of two documents identical in their terms except that one was signed and committed to by UPMC, the other by Highmark.

But the two documents still represent “a single order,” and they cannot operate differently because they are identical — by design — and were negotiated together among the three parties,” Shapiro’s legal team wrote in its response to UPMC’s request to exclude Highmark. “Highmark’s participation is relevant.”

Highmark — which describes the consent decrees as “one global agreement in one single order” — says that it will be impacted by the ruling out of the trial, and further pointed out that it has been participating in legal matters dealing with the 2014 consent decree all along.

At last month’s related Supreme Court hearing, a Highmark attorney spoke for several minutes and took questions from Supreme Court justices alongside Shapiro’s legal team.

“There is no legal reason to cut off that participation now — indeed it would be error to do so,” Shapiro’s attorneys wrote.

The Supreme Court’s ensuing May 28 opinion, which granted Shapiro’s right to a hearing on a 4-3 decision, mentioned that Shapiro’s proposed changes to the consent decrees would “bind both UPMC and Highmark.”

Without court intervention, UPMC and Highmark will officially split insurance networks for Medicare Advantage and cancer patients at the end of the month. A controversial prepay-in-full rule for out-of-network patients seeking nonemergency care at most UPMC hospital is set to take effect July 1.

RELATED: UPMC defends prepay rule for seniors

Highmark’s competing interests

Highmark likely stands to gain financially if Shapiro’s broader case against UPMC succeeds, and UPMC has accused Shapiro of siding with Highmark over the public interest in a politically charged quest to reshape health care to benefit self-interested parties.

In fall 2018, UPMC boasted its second-best year in Medicare Advantage sales, netting 8,000 new members while Highmark lost a net of 21,000 members, with many frustrated seniors reporting switching to UPMC or national alternatives such as Aetna to avoid getting caught in the middle of corporate feuding. UPMC says it now eclipses Highmark in the Medicare Advantage market in Western Pennsylvania, touting 37 percent of the region’s share to Highmark’s 26.2 percent. Highmark dominated the sector less than five years ago.

Ultimately, Shapiro’s goal is to force UPMC to contract with Highmark and any interested insurer to preserve access for patients across both systems and ensure the nonprofit behemoth is fulfilling its charitable duties.

UPMC has accused Shapiro of overstepping his bounds and siding with Highmark, whom it deems an unreliable payor and untrustworthy business associate, over the public good.

RELATED: These UPMC hospitals won’t accept Highmark as in-network patients in mid-2019