Bully lawsuit: UPMC takes its aggressive strategy to court

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As if its aggressive corporate behavior hasn't spewed enough ill will across Western Pennsylvania, UPMC, the self-described "$10 billion integrated global health enterprise," has sued Pittsburgh, a city whose shaky finances have been under state oversight for nine years.

The reason for the lawsuit, according to lawyers for the region's dominant health care network, is that the city and Mayor Luke Ravenstahl want to "target and damage" UPMC, operate in "total disregard of state and local law" and are trying to "gin up a new set of tax rules just for UPMC."

We think not. In fact, by the mayor's own words, the city appreciates UPMC's $100 million, decadelong commitment to the Pittsburgh Promise scholarship program.

All the city wants to do -- and has done by filing its lawsuit in March, a suit that UPMC wants to have dismissed -- is challenge UPMC's tax-exempt status as a public charity, under the statutes of Pennsylvania, in a court of law. If it were not a tax-exempt nonprofit, UPMC would owe the city $20 million more in taxes every year. As it is, the hospital system pays no payroll preparation tax and it pays property tax on real estate representing only 14 percent of the value of its portfolio.

All told, UPMC is Allegheny County's largest property owner, with $1.6 billion in land and buildings, 86 percent of it tax-exempt.

Being big, prosperous and expansive are not reasons alone to question an institution's tax-exempt status. Pennsylvania case law requires more than that. The five points of the HUP test, a 1985 court decision involving the Hospital Utilization Project, will determine UPMC's fate -- and a ruling last year against a summer camp in Pike County owned by a religious school was seen as a game changer.

If anything, the city of Pittsburgh would be remiss if it didn't test UPMC's worthiness in court. And we're confident that the city and county will examine other corporate-style nonprofits for similar challenges under the law, deflating UPMC's paranoia that it is being singled out.

Many people praise their UPMC doctors and thank their UPMC nurses, but UPMC's corporate strategy to reject Highmark insurance customers after 2014 and drive out the West Penn Allegheny Health System -- the thin line of defense against a UPMC monopoly -- is uncharitable behavior to the max.

Now, instead of simply defending itself against the city's challenge, UPMC bullies Pittsburgh with a countersuit. For shame.



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