Judge weighs whether health care giants' deal has to expire

HARRISBURG, Pa. — A hearing about whether the business relationship between Pittsburgh-based health care giants can be extended past its looming expiration date began Monday with argument about a provision that says the 2014 agreement can be modified.

Commonwealth Court Judge Robert Simpson has said he plans to issue a decision later this week about whether the consent decree involving Highmark Health and UPMC can be extended past its June 30 termination date.

Its expiration will trigger higher costs for Highmark insurance customers who use UPMC's vast network of hospitals, doctors and other medical providers.

Jonathan Goldman, a lawyer for the attorney general's office, which wants the deal extended indefinitely, told Simpson it was too late to change a provision that says parties can seek court modification if it is in the public interest. UPMC and Highmark were sophisticated parties represented by good lawyers when they signed the 2014 agreement, Goldman argued.

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"They did not speak up at the time, and silence is not enough," Goldman said.

He said the parties engaged in detailed negotiations over just about every part of the agreement, but UPMC never sought a "carve-out" to exempt the expiration date from the broad language of the modification clause.

A lawyer for UPMC, which wants the consent decree to end, said the modification clause was added by the attorney general's office toward the end of negotiations and characterized it as boilerplate.

"The agreement struck was a five-year transition deal, nothing more," UPMC lawyer Lee DeJulius said.

The state Supreme Court, which issued a divided opinion late last month that ordered the hearing, will consider Simpson's findings in deciding whether UPMC will be able to end its relationship with Highmark, which is on the same side as the attorney general's office.

Attorney General Josh Shapiro sued in February, seeking to keep the consent decree in place and arguing UPMC has wasted charitable assets through "exorbitant executive salaries and perquisites in the form of corporate jets and prestigious office space waste."

An agreement between Highmark and UPMC had been about to expire in 2014 when then-Gov. Tom Corbett got them to sign the consent decree to keep in-network rates for Highmark customers in the Pittsburgh area and Erie.

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Associated Press