United States District Court, N.D. Alabama, Southern Division
JERRY L. CONWAY, D.C., et al., Plaintiffs,
BLUE CROSS BLUE SHIELD OF ALABAMA, et al., Defendants.
DAVID PRO'CTOR UNITED STATES DISTRICT JUDGE.
case is before the court on the Verified Motion to Intervene
for the Limited Purpose of Seeking a Preliminary Injunction
filed by Certain University of Pittsburgh Medical Center
Hospitals (“UPMC”). (Doc. # 584). In the
Motion, UPMC seeks to intervene in this case to pursue a
preliminary injunction prohibiting the enforcement of (or
compliance with) the exclusive service areas provided for in
the License Agreements between BCBSA and the Blue Plans.
(Id.). The Motion has been fully briefed. (Docs. #
588-595). For the reasons explained below, the Motion is due
to be denied.
“the dominant provider of health care services in
western Pennsylvania.” Commw. ex rel. Kane v.
UPMC, 129 A.3d 441, 445 (Pa. 2015). “In 2002, UPMC
entered into a ten-year ‘provider agreement' with
Highmark under which it furnished health care services on an
in-patient or out-patient basis to subscribers of
Highmark's commercial insurance plans and billed Highmark
for those services at specified, negotiated rates.”
Kane, 129 A.3d at 445.
the Spring of 2011, UPMC announced it would not agree to
renew or renegotiate these provider agreements with Highmark,
the majority of which were set to expire on June 30,
2012.” Id. “UPMC cited as its reason
Highmark's proposed affiliation with the West Penn
Allegheny Health System, which would create another
integrated health care delivery system in competition with
the UPMC system.” Id. “The Commonwealth
[of Pennsylvania] considered the expiration of these
agreements as having deleterious consequences for members of
Highmark's health insurance plans because, according to
the Commonwealth, these members would be subjected to
‘significantly higher out-of-network charges for their
health care needs unless they either switched their health
care provider away from UPMC or their health plan away from
Highmark to one of the health insurers with which UPMC had
contracted, albeit at higher prices.'” Id.
2012, following a mediation organized by the Commonwealth,
UPMC and Highmark entered into an agreement that extended
certain of the entities' provider agreements until
December 31, 2014. Id. at 446. Also in May 2012,
UPMC filed a lawsuit against Highmark and West Penn in
federal court in Pennsylvania challenging, in part, the
Blues' exclusive service areas and Licensing Agreements.
(W. D. Pa. No. 2:12-cv-00692-JFC, UPMC v. Highmark, et
al., Doc. # 1).
August 8, 2012, Blue Cross and Blue Shield Association
(“BCBSA”) moved to intervene in the Western
District of Pennsylvania case, ostensibly to defend its
licenses of the Blue Cross and Blue Shield service names and
marks. (W. D. Pa. No. 2:12-cv-00692-JFC, Doc. # 43). After
BCBSA designated the case for tag along treatment in this
MDL, UPMC amended its Complaint to remove allegations
regarding the illegality of the exclusive service areas. (W.
D. Pa. No. 2:12-cv-00692-JFC, Doc. # 64). Thereafter, BCBSA
withdrew its Motion to Intervene. (W. D. Pa. No.
2:12-cv-00692-JFC, Doc. # 74).
2014, on at least two occasions, UPMC sent letters to various
non-Highmark Blue Plans, seeking to contract directly with
them. (Doc. # 585, Ex. E). BCBSA responded to UPMC's letters
stating that BCBSA grants Blue Plans the right to use the
Blue trademarks only in their respective service areas and
thus the non-Highmark Blue Plans could not accept UPMC's
offer to contract. (Doc. # 585-6).
2014, after unsuccessful attempts by the Pennsylvania Office
of Attorney General (“OAG”) to mediate a new
agreement between Highmark and UPMC, the OAG filed a petition
for review in the Commonwealth Court. Kane, 129 A.3d
at 447-48. Shortly thereafter, on June 27, 2014, UPMC and
Highmark entered into separate, nearly identical, reciprocal
Consent Decrees with the OAG. Id. at 448. The 2014
Consent Decrees ran for a term of five years and are set to
expire on June 30, 2019. Id. at 450.
April 2018, after this court's April 5, 2018 Standard of
Review opinion was issued, UPMC renewed its offer to contract
directly with the other Blues and was again rebuffed because
of the License Agreements. (Docs. # 585-10, 585-11).
unsuccessful attempts by the OAG to negotiate modifications
to extend the Consent Decrees, which Highmark (but not UPMC)
was willing to accept, on February 7, 2019, the OAG filed a
Petition to Modify the Consent Decree governing the
relationship between UPMC and Highmark. (Doc. # 585 &
31). That petition is pending in the Commonwealth Court of
Pennsylvania, No. 334 M.D. 2014. (Id.).
February 21, 2019, the same day it filed its Motion to
Intervene in this case, certain UPMC entities filed a class
action Complaint in the United States District Court for the
Middle District of Pennsylvania against Joshua D. Shapiro,
the Attorney General of the Commonwealth of Pennsylvania.
(M.D. Pa. No. 1:19-cv-00298-JEJ, UPMC Pinnacle, et al. v.
Shapiro, Doc. # 1). That case challenges efforts by
Shapiro to impose new obligations on Pennsylvania nonprofit
entities, including the following relevant requirements:
(a) Nonprofit health plans must contract with any healthcare
provider that seeks an MA or commercial contract;
(b) similarly, nonprofit healthcare providers must contract
with any insurer that wants a commercial or MA contract;
(c) if the parties to these forced contracts cannot agree on
the rates to be paid or the other terms, they must submit to
arbitration before a panel empowered to set the terms of the
contract for them;
(d) in the event that a nonprofit healthcare provider lacks a
contract with a particular insurer, any emergency services
provided to that insurer's subscribers must be reimbursed