UPMC, Highmark dispute over cancer treatment pricing should not be sent to arbitration, court says

The Pennsylvania Superior Court has ruled that Pittsburgh-based health giants UPMC and Highmark Health should settle their feud over the pricing of cancer treatment services in court, reports The Legal Intelligencer.

Here are seven things to know about the feud.

1. The feud between UPMC and Highmark dates back to 2010, when Highmark claims UPMC began overbilling for its oncology drugs and services. In April 2014, Highmark changed its fee schedule and stopped paying UPMC the higher rates, which cost UPMC about $200 million in reimbursements annually.

2. UPMC claimed Highmark changing its fee schedule was a breach of the their contract.

3. While the dispute was going on, UPMC, Highmark and state representatives prepared a consent decree as part of a transition plan to address how the organizations should handle the expiration of commercial contracts that were set to end in 2014.

4. Shortly after UPMC and Highmark entered into the consent decree, Highmark sued UPMC for breach of contract and unjust enrichment, challenging the allegedly inflated oncology bills dating back to 2010, the report states.

5. UPMC claimed the terms of the consent decree required the dispute to be settled through arbitration and asked the court to dismiss Highmark's suit.

6. The Allegheny County Court of Common Pleas determined that only the underlying contracts, and not the consent decree, should be relevant to the feud and rejected UPMC's attempts to dismiss the case, according to the report. A unanimous three-judge panel of the superior court affirmed the lower court's decision Dec. 2.

7. Superior Court Judge John T. Bender noted that the state attorney general's office, the Pennsylvania Department of Insurance and the state health department had exclusive jurisdiction to enforce the terms of the consent decree, and it was clear those state agencies had not done so, reports The Legal Intelligencer.

"If Highmark violated the consent decree by filing this lawsuit, commonwealth officials — and, notably, not UPMC — have exclusive jurisdiction to enforce the arbitration provisions of the consent decrees and compel Highmark to dismiss this lawsuit," Judge Bender said. "It is undisputed between the parties that commonwealth officials have taken no such enforcement action to stop this litigation from proceeding. Further, because commonwealth officials have not sought to dismiss this lawsuit or compel arbitration, we must conclude that the arbitration provisions in the consent decree do not require arbitration of the issues raised in Highmark's complaint."

 

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