State Sen. Fontana Discusses Highmark-UPMC Dispute

Over the past few months, I have been asked time and time again why the state cannot force the University of Pittsburgh Medical Center (UPMC) and Highmark to enter into another contract.  Individuals are concerned about not only the cost of their health care, but even more importantly, what it will mean to their access to health care and the doctors and facilities that they choose.

Quite simply, the role of the government in the regulation of business is very limited.  The Commonwealth cannot force two private companies into a contract.  While there is a broad grant of power to Congress under the Commerce Clause, the state’s ability to regulate business has been framed by whether it impacts the health, safety and welfare of the residents of the Commonwealth.  Health care access certainly seems to fit those requirements, but in the scenario between UPMC and Highmark, health care access isn’t being cut off – only changed. While additional regulations can be imposed, a contract cannot be forced on these two private organizations.

Generally, the Commonwealth has state insurance laws that impose requirements and limitations on the way insurance companies do business.  There are numerous pieces of legislation that have been introduced to try to deal with this issue, including making substantial changes to the laws and regulations that govern health insurance.  One such law, Act 94, sets forth rules for when a company decides to cancel a health care contract.  It provides that notice must be given to the consumers that would be impacted and also allows the Insurance Commissioner to impose a six-month “cooling off” period where the contract would be extended. 

I am a co-sponsor of Senate Bill 1358 (SB 1358) that takes some additional steps to protect the interests of consumers in this disagreement.  The legislation amends existing state law to provide that the Insurance Commissioner may extend the terms of the existing contract to allow the marketplace to adjust to the many changes.  It would ensure physician services are covered by the law, apply the law to contract expirations as well as terminations, allow for the use of the Act where a hospital has 5% or greater share of the available beds in defined areas and allows for the extension to last up to 36 months.

The argument has also been made to me that the state should strip one or both entities of their non-profit status.  While I would strongly agree that both organizations are acting like for-profit businesses, it is not the Commonwealth that determines whether the companies are non-profit. 

That status is one determined by the Internal Revenue Service (IRS).  Pennsylvania’s role is in determining whether the organization is an Institution of Purely Public Charity.  That designation allows a company to be exempted from property taxes and can only be challenged by a taxing jurisdiction. 

Because any changes to the Institutions of Purely Public Charity law could impact other charities in a negative way, I have attempted to broach the subject in a different way – by providing that organizations pay property taxes on the assessed land value of the property they own (not the buildings) as a contribution to the general welfare of the community in which they are located.  Although Senate Bill 1281 (SB 1281) has not yet been considered by the Senate Finance Committee, I am hopeful that this issue will be taken up in the near future. 

Another way to address this would be by imposing a payroll tax, an idea that has been proposed by many and one which I am considering.  Both UPMC and Highmark are sitting on massive amounts of reserves and it is clear that both entities, while enjoying non-profit status, operate like for-profit businesses.  A true non-profit would be returning those reserves back to consumers by lowering costs and insurance premiums.  Short of that, one of these taxing options may be the best way to ensure these entities are contributing their fair share to the common good.

The constituents that I have spoken with are, understandably, concerned with the current impasse, but, again, it comes down to their access to health care – and the doctors and facilities that they choose.  It’s a novel idea, but perhaps now is the very time that we should be talking about single payer healthcare. 

The Family & Business Healthcare Security Act is not a new idea, but one that has been introduced in several subsequent legislative sessions.  The current version, Senate Bill 400 (SB 400), is in the Senate Banking & Insurance Committee.  The bill calls for quality and comprehensive health care for all permanent and temporary legal residents of the Commonwealth.  It allows consumers to pick their own doctor, allows consumers and their doctor to determine the best course of treatment (not an insurance company), prohibits denial of coverage, reduces costs, makes health care consumer-based instead of employer-based and is portable.

For more information on the legislation, you can also visit http://www.healthcare4allpa.org/ for details on how the bill was created, how its proponents see it impacting health care in Pennsylvania, arguments for why we need it and whether Pennsylvanians want to go this route.

I hope that you will take the time to weigh in with your thoughts on the current dispute, the proposed legislation as well as single payer health care.  I look forward to your input on this and other issues that are of interest and importance to you.

Additionally, this week I launched a new and improved website.  You can visit my new website at www.senatorfontana.com.  I hope you enjoy it!