UPMC could face legal action from the state

HARRISBURG --The state attorney general's review of the UPMC-Highmark contract dispute is reaching its end stage, with a legal complaint against UPMC prepared in case discussions between regulators and the Pittsburgh health care giants do not resolve key issues, according to several people with knowledge of the matter.

The office of Attorney General Kathleen Kane has not indicated whether it will go ahead with filing the complaint, the sources said. Instead, the office participated in discussions late last week that Gov. Tom Corbett convened between state regulators and members of the management of Highmark and UPMC. The Department of Health and Insurance Department are representing the administration in the talks.

Ms. Kane could not be reached for comment.

Sources with direct knowledge of the situation said the office's review had reached the point of drafting a complaint containing claims related to consumer protection and to UPMC's legal obligations as a nonprofit charity.

The possible legal action addresses potential financial barriers for Highmark customers who seek to access the UPMC hospital system.

The office has informed members of the Corbett administration and select Western Pennsylvania legislators, both Republican and Democratic, about its efforts.

The contract dispute between UPMC, the region's largest hospital system, and Highmark, its dominant health insurer, has been a subject of focus at the Capitol.

UPMC says it does not want to negotiate a new reimbursement contract, which would offer health care services at in-network rates to Highmark's commercial insurance patients, now that Highmark has acquired West Penn Allegheny Health System and launched its own health network.

In a statement, a spokesman for Ms. Kane, responding to inquiries from the Pittsburgh Post-Gazette, said the office had attended last week's meetings and "presented important steps necessary to avoid this looming crisis for thousands of patients in the region."

"Since Attorney General Kane took office, our attorneys have been working on a potential remedy to ensure fair access for patients in Western Pennsylvania," spokesman J.J. Abbott said in the statement.

"Attorney General Kane is committed to using the full resources of her office to resolve these issues and ensure that all parties truly put patients in the region first," Mr. Abbott said.

Last week, in a separate response to an inquiry about the attorney general's participation in the talks, the office released a statement saying its attorneys had been working for more than 11/2 years on "a possible resolution" to the issues.

"A final version of this was presented to the attorney general and approved last week," that statement said.

Mr. Corbett two years ago brokered an extension that is set to expire at the end of 2014.

Highmark faces a July 31 deadline to file a post-contract transition plan.

"UPMC looks forward to working with the governor, insurance commissioner, secretary of health and attorney general on their collective goal of the best possible, patient-focused transition plan as the contracts expire at the end of this year," said UPMC spokesman Paul Wood.

Legislative efforts to shape the dispute have not moved forward.

Rep. Jim Christiana, R-Beaver, and Rep. Dan Frankel, D-Squirrel Hill, have introduced bills that would require hospitals and physicians operating as part of an integrated delivery network to contract with any willing insurer.

The proposals were the subject of a House hearing in December but have not moved from committee.

In the Senate, Sen. Randy Vulakovich, R-Shaler, and Sen. Jay Costa, D-Forest Hills, have introduced similar legislation, which likewise has not received a vote.

Karen Langley: klangley@post-gazette.com or 717-787-2141 or on Twitter @karen_langley.

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