Tuesday, September 20, 2011

Recap of the PA Senate Banking and Insurance Committee Hearing

There has been a great deal of feedback and response to the September 8 Town Hall meeting, thanks in part to action items such as the below post card (which I encourage you to print and mail to Attorney General Kelly) and ongoing media coverage. Please take a moment to view additional Town Hall pictures.

On September 13, the Pennsylvania Senate Banking and Insurance Committee held a hearing about UPMC vs. Highmark at the University of Pittsburgh. Senator Don White (R-Armstrong) Chairs the Committee and deserves credit for planning and conducting a very informative session. Most of the Committee attended, in addition to myself and Senators Costa, Fontana, and Pippy. 

Among those who provided testimony were officials from West Penn Allegheny Health System (WPAHS), Pennsylvania Insurance Commissioner Michael Consedine, and Chief Deputy Attorney Generals James Donahue III and Mark Pacella (Antitrust Section and Charitable Trusts and Organizations Section, respectively). 

Please take a moment to view full testimony, video, and pictures of the hearing. A lot of new information was provided, particularly by the office of the Attorney General, which gave a thorough description of its legal powers and review protocol for transaction such as the proposed Highmark acquisition of WPAHS.

Chief Deputy Attorney General Donahue confirmed the Charitable status' of Highmark and UPMC,  and went on to describe the elements that his office will evaluate when reviewing the proposed Highmark acquisition of WPAHS:
"The scope of review varies with the specifics of each transaction, but generally seeks to ensure that the transaction is the product of due diligence after consideration of all other available alternatives; that it is free of private inurement; that full and fair value is being paid when any sale of charitable assets is implicated; that any restricted assets will remain segregated and committed to the intended charitable purposes; and that the transaction will not unduly impact the community's access and availability to health care." [emphasis added]
UPMC has said repeatedly that if Highmark acquires WPAHS, there will not be a new provider contract between UPMC and Highmark. Is UPMC effectively opposing the merger on legal grounds by refusing to negotiate?

We still have nearly a year before the UPMC-Highmark provider contract expires - this was an overarching theme of the September 13 hearing. But if the state approves Highmark's acquisition of WPAHS, how likely is it that UPMC will challenge the merger in court? 


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