Blues challenge UPMC, call Highmark contract dispute 'of its own making'

By | March 14, 2019

Dive Brief:

  • The Blues Association and other health plans argued in a filing that it’s too late for UPMC to join the federal antitrust suit challenging the way Blue Cross Blue Shield plans operate.
  • Defendants including the Blue Cross Blue Shield Association filed a response to UPMC, Pittsburgh’s dominant health provider, Thursday in federal court in the Northern District of Alabama.  
  • The Blues said “UPMC cannot manufacture urgency from its own wrongdoing,” according to the filing.  Allowing UPMC to intervene now would “unduly delay this case,” the defendants said. Replies from the plaintiffs challenging the Blues plans are due Thursday.  

Dive Insight:

UPMC wants to contract with other Blue Cross Blue Shield plans but said it’s barred from doing so because of the way Blues plans must operate and as it fights its hometown Blues plan, Highmark.

By asking to join the federal antitrust case, UPMC is looking for the courts to stop the Blues plans from enforcing their own market allocation agreements that prevent the health system from contracting with out-of-state Blues plans.  

UPMC and its rival Highmark are at odds over a new contract agreement, threatening patient access to the other’s facilities. Because no contract exists with Highmark, other Blues plan members do not have in-network access to UPMC facilities. A contract agreement between a provider and the local Blues affiliate ensures access to out-of-state or other Blues plans members. 

That’s important to UPMC, which said it attracts patients from all over the country. 

The lawsuit, which includes providers and employers as plaintiffs, has been ongoing for years. The plaintiffs allege that BCBS plans avoid competition with one another through non-compete pacts and stake out their own geographic territory to sell plans as the exclusive BCBS carrier, avoiding competition with other Blues. In Decemberthe 11th U.S. Circuit Court of Appeals upheld a federal court ruling from April that found the 36 BCBS plans’ agreement to limit competition is an antitrust violation, delivering an initial win to the plaintiffs. 

The victory means the antitrust case “may now proceed,” Joe Whatley, co-lead counsel for the plaintiffs, previously said in a statement.

By upholding April ruling, the 11th Circuit has eliminated the need for plaintiffs to provide any kind of evidence of the economic losses they’ve incurred as a result of BCBS’ alleged foul play

UPMC and Highmark, the local Blues affiliate, are integrated healthcare systems that both operate their own insurance plan and provider services. After the two were unable to come to a contract agreement years ago, the state intervened and helped mediate a consent decree, which in turn guaranteed patients access and choice.  

That consent decree is about to expire and UPMC said it will not modify the terms. The refusal to contract with its rival led Pennsylvania’s Attorney General Josh Shapiro to file a lawsuit against the nonprofit system, alleging that UPMC was shirking its obligations as a nonprofit charity. UPMC has said Shapiro is overstepping his bounds. 

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