                                  [J-77-2015]
                   IN THE SUPREME COURT OF PENNSYLVANIA
                               MIDDLE DISTRICT

                  SAYLOR, C.J., EAKIN, BAER, TODD, STEVENS, JJ.


COMMONWEALTH OF PENNSYLVANIA,              :   No. 48 MAP 2015
BY KATHLEEN G. KANE, ATTORNEY              :
GENERAL; PENNSYLVANIA                      :   Appeal from the Order of the
DEPARTMENT OF INSURANCE, BY                :   Commonwealth Court at No. 334 MD
TERESA D. MILLER, INSURANCE                :   2014 dated May 29, 2015
COMMISSIONER; AND PENNSYLVANIA             :
DEPARTMENT OF HEALTH, BY DR.               :   ARGUED: October 6, 2015
KAREN MURPHY, SECRETARY OF                 :
HEALTH                                     :
                                           :
                                           :
             v.                            :
                                           :
                                           :
UPMC, A NONPROFIT CORP.; UPE,              :
A/K/A HIGHMARK HEALTH, A                   :
NONPROFIT CORP., AND HIGHMARK,             :
INC., A NONPROFIT CORP.                    :
                                           :
                                           :
APPEAL OF: UPMC, A NONPROFIT               :
CORP.                                      :

                                      OPINION

MADAME JUSTICE TODD                                 DECIDED: November 30, 2015
      In this case, our Court is principally tasked with reviewing the order of the

Commonwealth Court interpreting a provision of a consent decree, negotiated by the

Office of Attorney General of Pennsylvania (“OAG”)1 and approved by the


1   The OAG in this matter is acting in its parens patriae capacity to represent the
interests of the people of the Commonwealth, and in execution of its duty to supervise
charitable entities. The OAG additionally represents other Commonwealth parties
which have been involved in the proceedings in the Commonwealth Court — the
Pennsylvania Department of Insurance and the Department of Health. For ease of
(continuedB)
Commonwealth Court, between Appellant UPMC, a nonprofit health care corporation,

and Appellee Highmark,2 a nonprofit medical insurance corporation, which establishes

the obligations of both parties with respect to certain health care plans serving

vulnerable populations — i.e., children, the elderly, and the poor.     Specifically, we

consider whether the Commonwealth Court erroneously interpreted this “vulnerable

populations” provision as creating a contractual obligation for UPMC to treat all

participants in Highmark’s “Medicare Advantage Plans,”3 — for which Highmark and

UPMC currently have provider contracts which UPMC has indicated it will terminate as

of December 31, 2015 — as “in-network” for purposes of determining the rates it is

permitted to charge these individuals for physician, hospital, and other medical services

during the duration of the consent decree — until 2019.4

      After careful review, we affirm the order of the Commonwealth Court finding that

the vulnerable populations clause of the consent decree requires UPMC to “be in a


(Bcontinued)
discussion, we, therefore, will collectively refer to all of these parties as “the
Commonwealth.”
2   “Highmark” consists of two corporate entities — UPE (“Highmark Health”) and
“Highmark Inc.” We will refer to both entities, as do the parties and the Commonwealth
Court, by the unified designation of “Highmark.”
3  As explained more fully herein, such plans are classified as “Medicare Part C” plans
under which the federal government pays a private health insurer such as Highmark a
fixed amount per enrollee for the insurer to pay health care providers for providing
Medicare Part A (inpatient) and Part B (outpatient) medical services to the enrollee.
4 As discussed at greater length, infra, under the consent decrees at issue in this case,
a health care provider who is considered “in-network” with a health insurer has
contracted with the health plan to treat the plan members at a negotiated rate. The
health plan members are, consequently, charged no more than the plan’s co-pay, co-
insurance or deductible, and the negotiated rate which is paid by the health plan to the
health provider is deemed to be payment in full for the medical services the provider has
rendered.



                                     [J-77-2015] - 2
contract” with Highmark for the duration of the consent decree, and, thus, that UPMC

physicians, hospitals, and other services shall be treated as “in-network” for participants

in Highmark Medicare Advantage plans which are subject to provider contracts between

Highmark and UPMC set to be terminated by UPMC on December 31, 2015. We also

affirm the portion of the Commonwealth Court’s order requiring judicial approval for any

further changes in business relationships between these parties which are governed by

the consent decree, but quash as not yet ripe for review the portion of the order which

directs the OAG to file a request for supplemental relief to effectuate compliance with

the consent decree.

                         I. Background and Procedural History

        As developed by the Commonwealth in the proceedings below, UPMC, which

was incorporated in 1982 as a nonprofit corporation under our Nonprofit Corporation

Law,5 is the dominant provider of health care services in western Pennsylvania,

occupying nearly 60 percent of the “medical-surgical market” in Allegheny County and,

overall, 35.7 percent of this market in the entire 29 county region of western

Pennsylvania. Commonwealth Petition for Review, 6/27/14, at 4. UPMC also maintains

a controlling interest in an “insurance holding company” which includes the “UPMC

Health Plan” which covers approximately 2 million people in western Pennsylvania. Id.

As explained by the Commonwealth, under this arrangement, UPMC operates an

“integrated health care delivery system” whereby one entity provides health insurance,

and, also, delivers health care services through physicians, hospitals, and other

ancillary medical care facilities. Id. at 6.




5   15 Pa.C.S. §§ 5101-5997.



                                        [J-77-2015] - 3
       Highmark possesses a controlling interest in an insurance company holding

system in which two of its subsidiaries operate not-for-profit health care insurance

plans. One subsidiary — Highmark Blue Cross — is a nonprofit hospital insurance plan,

and another — Highmark Blue Shield — is a nonprofit health care insurance plan.

Commonwealth Court Opinion, 6/29/15, at 3 n.3; Commonwealth Petition for Review,

6/27/14, at 5.   Highmark’s health care insurance plans are sold, commercially, to

businesses and individuals, and, at the time of the filings in this matter, were utilized by

more than 60 percent of the people in the western Pennsylvania region’s health care

market. Commonwealth Petition for Review, 6/27/14, at 5.

       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. Id. Under the terms of other separate provider

agreements covering Highmark’s Medicare Advantage products, Highmark and UPMC

mutually agreed that UPMC would be considered “in-network” for those products.

Stipulations Between the Commonwealth and UPMC, 5/27/15, at 1. However, in 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.          Commonwealth Petition for

Review, 6/27/14, at 5-6.      The Commonwealth 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




                                      [J-77-2015] - 4
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. at 6.

       This prospect led to legislative hearings and the appointment of a mediator by

then-Governor Tom Corbett in May 2012.            UPMC and Highmark entered into a

“Mediated Agreement” that month which provided, inter alia, that Highmark’s Medicare

Advantage members would have “in-network access to all UPMC hospitals and

physicians” until December 31, 2014.          Mediated Agreement, 5/2/12, 1.    Under a

separate provision of this agreement, UPMC also agreed to “continue to provide in-

network hospital and physician services at preferred rates for certain Highmark plans

which serve vulnerable populations, specifically Special Care, pa. fair care (sic), CHIP

and Guaranteed Issue plans, for such time as these plans, continue to be offered by

Highmark.” Id. Although there were, in all, eleven individual “Medicare Advantage

Provider Agreements” — each signed by Highmark, UPMC, and a hospital in the UPMC

system — UPMC, acting on behalf of all of the individual hospitals, and Highmark

entered into a global amendment to all of the individual agreements which incorporated

the terms of the Mediated Agreement.          This global amendment also provided that

UPMC and Highmark would “negotiate rates and terms for continued Highmark member

access to certain UPMC services on an in-network basis effective upon termination of

the Medicare Advantage Provider Agreements, including Western Psychiatric, certain

oncological services, UPMC Bedford, and UPMC Northwest.” Amendment to Medicare

Advantage Provider Agreements, 9/13/12, at 2. Additionally, the global amendment

specified that the provider agreements could not be terminated before December 31,

2014, and that, subsequently, each provider agreement would automatically renew from

year to year, unless either party provided notice of termination no later than April 1 of




                                       [J-77-2015] - 5
that year. Commonwealth Court Opinion, 6/29/15, at 6. If a party provided such notice

of termination, then the termination would be effective as of the end of the calendar year

covered by the contract. Id.

        On April 29, 2013, the Pennsylvania Insurance Department approved Highmark’s

affiliation with the West Penn Allegheny Health System, contingent on Highmark

fulfilling a number of conditions, one of which included Highmark’s obligation to file a

formal transition plan with the Insurance Department if it and UPMC could not negotiate

new provider agreements by July 31, 2014. Insurance Department Order, 4/29/13, at

22.     Thereafter, the already strained relations between UPMC and Highmark

deteriorated precipitously.    According to the Commonwealth, on June 12, 2013,

because it now viewed Highmark as a competing health care provider, UPMC’s Board

of Directors passed a resolution in which it resolved “to forego ‘any extension of the

existing contracts, or any new commercial contracts providing Highmark with in-network

access to any current UPMC hospitals or physicians in Southwestern Pennsylvania

beyond Children’s Hospital of Pittsburgh of UPMC, Western Psychiatric Institute and

Clinic, UPMC Northwest, UPMC Bedford Memorial and certain other services . . . as

specified in the Mediated Agreement.’” Commonwealth Petition for Review, 6/27/14, at

8.    The Commonwealth noted that, rather than attempting to negotiate over these

matters, the parties escalated their dispute and “engaged in extensive and costly

lobbying, advertising campaigns, and litigation which . . . contributed to the public’s

confusion and misunderstanding.” Id. at 10.

        In February 2014, Highmark wrote to UPMC and informed UPMC that it had

observed that the amount it was paying for the administration of oncology drugs under

the fee schedules it had previously negotiated for its commercial and Medicare

Advantage products had, in its view, increased dramatically, which Highmark attributed




                                     [J-77-2015] - 6
to hospitals’ billing for the administration of such drugs to cancer patients as an

outpatient service, even though the drugs were administered in a physician’s office. In

the letter, Highmark informed UPMC that, effective April 1, 2014 — the date on which

the provider agreements were set to renew — it would be revising its outpatient fee

schedule under its commercial and Medicare Advantage policy to reduce the fees it paid

for the administration of the drugs due to objections raised by its customers, public

officials, and other members of the community to these billing practices. Highmark

Letter to UPMC, 2/25/14.

       UPMC disputed Highmark’s claims that the provider agreements permitted it to

unilaterally change rates in this fashion, but it did not take any action to terminate those

agreements by the April 1 automatic renewal date. On May 9, 2014, UPMC served

Highmark with a demand for arbitration which “included the disputed issues regarding

oncology billing and Highmark’s unilateral rate reductions.” Declaration of W. Thomas

McGough, Jr., Exhibit 3 to Highmark Answer to Emergency Application for Supersedeas

in the Supreme Court of Pennsylvania, at ¶ 24. Subsequently, on June 13, 2014,

UPMC submitted a statement of claims to the American Health Law Association

(“AHLA”) to be arbitrated, which originally covered agreements involving four hospitals,

and was later amended in August 2014 to cover agreements involving nine additional

hospitals.6

6   These arbitration proceedings were concluded on November 6, 2015, with the
arbitration panel ruling that Highmark was not justified in making unilateral adjustments
to its fee schedule under the individual commercial provider agreements between
Highmark and UPMC, originally set to expire in June of 2012, or under the 2012
Mediated Agreement which extended those individual agreements until December 31,
2014. See In the Matter of the Arbitration between UPMC, et. al, v. Highmark, et. al,
AAA No, 01-14-002-1500 (11/6/15). UPMC has filed an application pursuant to
Pa.R.A.P. 2501(a) requesting that we consider this decision as supplemental authority.
We grant the application; however as this ruling does not purport to address UPMC’s
duties under the Consent Decree at issue in this case, nor, as we explain infra, did
(continuedB)

                                      [J-77-2015] - 7
       By June 2014, after it became clear that UPMC and Highmark were not going to

be able to negotiate a continuation of the provider agreements on their own, the

Commonwealth filed a petition for review in the Commonwealth Court, asserting that

both Highmark and UPMC had breached the 2012 Mediated Agreement, to which, the

Commonwealth contended, the public at large was a third-party beneficiary. As specific

relief, the Commonwealth requested, inter alia, that the Commonwealth Court find the

public to be a third-party beneficiary and, also, require the parties to enter into a variety

of agreements to settle disputed issues regarding access to medical care at UPMC

facilities by Highmark subscribers after the expiration of the provider agreements on

December 31, 2014. Specifically, as relevant to the instant matter, the Commonwealth

requested that the court:

              Require that respondents reach an agreement for hospital,
              physician and follow-up services for Highmark members who
              are part of vulnerable populations, including, but not limited
              to consumers age 65 and older who are eligible or covered
              by Medicare/Medicare Advantage/MediGap health plans;
              and consumers who are eligible or covered by CHIP,
              Medicaid, fee-for-service and Medicaid managed health
              plans within 30 days of this Court's order and, failing such an
              agreement, impose last best offer arbitration.
Commonwealth Petition for Review, 6/27/14, at 13.7



(Bcontinued)
Highmark’s actions of claiming that it was entitled to unilaterally reduce the oncology
rates it paid UPMC prior to the entry of the Consent Decree allow UPMC to avoid its
obligations under the vulnerable populations’ clause of the Consent Decree, we will not
address it in this opinion.


7 The Commonwealth also requested identical relief for the parties’ alleged violation of
provisions of the Pennsylvania Insurance Company Law, 40 P.S. § 991.2111(1) and
2111(4), through their ongoing contractual dispute.



                                      [J-77-2015] - 8
      Thereafter, the Commonwealth Court supervised the Commonwealth’s efforts to

mediate an agreement which would accomplish this objective, as well as settle the other

outstanding and disputed issues between the parties. As the Commonwealth Court

noted, because there was such intense acrimony between the parties, they would not

negotiate with each other, nor sit together in the same room during the process.

Commonwealth Court Opinion, 6/29/15, at 5. Consequently, attorneys representing the

Commonwealth parties were forced to engage in what the OAG termed “shuttle”

diplomacy, Brief of the Attorney General at 12, whereby they would ferry offers and

counteroffers back and forth between the parties.       Eventually, the Commonwealth

secured a comprehensive agreement between the parties in the form of a consent

decree, but, because the parties refused to sign a common document, two final

separate consent decrees were prepared — one for Highmark and one for UPMC

(collectively, the “Consent Decrees”).   Each party’s decree has identical provisions

except for the fact that Highmark’s Consent Decree requires Highmark to comply with

its terms, and UPMC’s Consent Decree requires UPMC to comply with its terms.

Highmark Consent Decree, 6/27/15, at 6; UPMC Consent Decree, 6/27/15, at 6. The

Commonwealth parties are signatories to both decrees.

      Inasmuch as the present dispute involves the Commonwealth Court’s

interpretation of UPMC’s Consent Decree, we focus our discussion, as do the

Commonwealth Court and the parties, on the obligations which UPMC assumed under

its decree; however, because its decree and Highmark’s are identical in all material

respects, including the provisions at issue in this appeal — those governing Vulnerable

Populations, defining In-Network care, and providing for the manner in which rates are

to be set for In-Network care for the duration of the Consent Decree — for ease of

discussion, we shall refer to UPMC’s decree by the designation “Consent Decree.” The




                                    [J-77-2015] - 9
“Vulnerable Populations” clause of the Consent Decree at the heart of this dispute

provides:

               2. Vulnerable Populations — [1] UPMC and Highmark
               mutually agree that vulnerable populations include: (i)
               consumers age 65 or older who are eligible or covered by
               Medicare, Medicare Advantage, (ii) Medigap health plans,
               (iii) Medicaid and/or (iv) CHIP.         [2] With respect to
               Highmark’s covered vulnerable populations, UPMC shall
               continue to contract with Highmark at in-network rates for all
               of its hospital, physician and appropriate continuity of care
               services for CHIP, Highmark Signature 65, Medigap and
               commercial retiree carve out as long as Highmark does not
               make unilateral material changes to these programs. [3]
               UPMC shall treat all Medicare participating consumers as In-
               Network regardless of whether they have Medicare as their
               primary or secondary insurance. [4] UPMC reserves the
               right to withdraw from these arrangements if Highmark
               should take the position that it has the authority to revise the
               rates and fees payable under those arrangements
               unilaterally and materially.8

§ IV(A)(2).
        The Consent Decree defines “In-Network” in the following fashion:

               I. “In-Network” means where a health care provider has
               contracted with a Health Plan to provide specified services
               for reimbursement at a negotiated rate to treat the Health
               Plan’s members. The member shall be charged no more
               than the co-pay, co-insurance or deductible charged by his
               or her Health Plan, the member shall not be refused
               treatment for the specified services in the contract based on
               his or her Health Plan and the negotiated rate paid under the
               contract by the Health Plan and the member shall be
               payment in full for the specified services.
UPMC Consent Decree, § II(I).9

8  As detailed infra, the meaning and operation of these four numbered sentences are
the focus of the parties contentions in this appeal and we have numbered them
consistent with the parties’ usage.
9   This provision is II(J) in Highmark’s Agreement.



                                      [J-77-2015] - 10
       Further, the Consent Decree contains the following provisions explaining how

rates for medical services would be determined if the parties could not reach agreement

on this subject after good faith negotiations:

              C.     Miscellaneous Terms

                     (1)                  * * *

              a.     Rates

              i.      For the period, January 1, 2015 to December 31,
              2015, rates for all In-Network services covered in this
              Consent Decree, except for those rates currently being
              arbitrated by UPMC and Highmark, shall revert to the last
              mutually agreed upon rates or fees by UPMC and Highmark
              with the applicable medical market basket index (MBI)
              increase applied January 1, 2015.

              ii.     For rates currently being arbitrated, in the event that
              the current arbitration between UPMC and Highmark finds in
              favor of UPMC, then the rates and fees under the Consent
              Decree will revert to the rates in effect before April 1, 2014
              as of the date of the arbitral award and shall remain in place
              through December 31, 2015. If as a consequence of the
              arbitral award, Highmark owes UPMC for underpayments,
              Highmark shall pay UPMC appropriate interest. If as a
              consequence of the arbitral award, UPMC owes Highmark
              for overpayments, UPMC shall pay Highmark appropriate
              interest. If an arbitral award is not decided before January 1,
              2015, Highmark shall increase its payments by one-half the
              difference between Highmark’s April 1, 2014 schedule and
              its rate schedule in effect before April 1, 2014 for the period
                                                         10
              January 1, 2015 to December 31, 2015.[ ]

              iii. For the period beginning January 1, 2016 to the
              expiration of the Consent Decree or the expiration of any
              agreements between UPMC and Highmark for all In-Network
              Services, whichever is later, the rates shall be the rates

10   As discussed, infra, these two provisions refer to the recently concluded AHLA
arbitration proceeding which was in progress at the time of the entry of the Consent
Decree.



                                      [J-77-2015] - 11
              mutually agreed to by Highmark and UPMC, or UPMC and
              Highmark shall engage in a single last best offer binding
              arbitration to resolve any dispute as to rates after December
              31, 2015 as set forth in paragraph C(2) below.
Consent Decree, § IV(C)(1).            The Consent Decree also specified that the

Commonwealth was to mediate any “[d]isputed terms set forth in [the] Consent Decree

and related to the Consent Decree and unrelated to rate reimbursement” and, if that

was unsuccessful, then the dispute was to be submitted to binding arbitration. Id. at

§ IV(C)(1)(b). The Commonwealth also was given the exclusive “jurisdiction” to enforce

the decree. Id. § IV(C)(4).

       Additionally, the Consent Decree provides that the Commonwealth Court is to

retain jurisdiction, for the duration of its existence, “to enable any party to apply to [the

Commonwealth Court] for such further orders and directions as may be necessary and

appropriate for the interpretation, modification, and enforcement of this Consent

Decree.”     Consent Decree, § IV (C)(11).           President Judge Pellegrini of the

Commonwealth Court entered both decrees as orders of court on July 2, 2014, and they

remain in effect until July 2, 2019.

       On August 29, 2014, Highmark filed its transition plan with the Pennsylvania

Department of Insurance which provided, inter alia, that “[u]nder the Consent Decrees

Highmark and UPMC agreed that UPMC would continue to contract with Highmark at

in-network rates for senior care.”      Highmark Transition Plan, 8/29/14, at 12.       With

respect to “[c]urrent Medicare Advantage Products,” the plan described Highmark’s view

of the effect of the interplay between the Consent Decrees and these products: “[u]nder

the Consent Decrees, seniors in the current broad network Medicare Advantage

products will continue to have in-network access to UPMC facilities and physicians after

December 31, 2014. The current broad network contracts with UPMC extend until

December 31, 2015 and renew annually unless either party provides prior notice.” Id.



                                       [J-77-2015] - 12
      On September 3, 2014, Highmark commenced a civil lawsuit against UPMC, as

well as eight individual UPMC hospitals and three physician group practices, in the

Court of Common Pleas of Allegheny County (the “Allegheny County lawsuit”). This suit

alleged that UPMC had engaged in unlawful billing practices beginning in August 2010

until the time of the suit by changing the manner in which billing for oncology supplies

and services as if they were delivered on a hospital outpatient basis, when, according to

Highmark, they were, in actuality, delivered at a physician’s office as was the previously

established practice. Complaint, 9/3/14, at 4. Highmark also alleged in the suit that

UPMC had “begun transferring the billing of oncology services among UPMC hospitals

in order to further increase their prices and profits.” Id. at 5. Highmark contended these

practices “breached the terms of the hospital contracts UPMC and the UPMC Hospitals

executed with Highmark.” Id. at 4-5. UPMC denied these allegations in its answer to

Highmark’s complaint.

      Additionally, Highmark recited in this complaint the circumstances surrounding its

April 1, 2014, adjustment of the fee schedule for reimbursement of the administration of

oncology drugs.    Related thereto, Highmark asserted that it was “the custom and

practice under the UPMC Agreements that Highmark . . . make unilateral changes to the

fee schedules to reflect changes in conditions” without prior approval of UPMC; that the

UPMC Agreements did not limit Highmark’s ability to adjust these fee schedules; that

Highmark reserved the right to adjust the fee schedules and rates “at any time,” and,

when it had done so prior to 2013, UPMC had acquiesced in its action. Id. at 43-44. As

relief, Highmark sought a declaratory judgment that its “April 1, 2014 adjustments to the

fee schedule rates for Subject Oncology Services under the UPMC Agreements were

proper and appropriate under each of the respective UPMC Agreements.” Id. at 45. In

an amended complaint filed on November 21, 2014, Highmark replaced this declaratory




                                    [J-77-2015] - 13
action count with a claim for unjust enrichment based on the amount it had previously

paid for the alleged overbilling by UPMC in the administration of the oncology drugs.11

      Later in September of 2014, Highmark began marketing a new Medicare

Advantage program known as Community Blue, which it had previously invited UPMC

to join as an in-network provider in February 2014, but UPMC had declined. As UPMC

was not considered an in-network provider under Community Blue, it wrote to Highmark

on September 25, 2014, and informed Highmark that it considered this offering to be a

breach of the Consent Decree which it viewed as requiring “all UPMC hospitals and

physicians to be in network for the ‘vulnerable populations’ served by Highmark,

including Medicare Advantage subscribers.” UPMC Letter to Highmark, 9/26/14.

      After being made aware of UPMC’s objections, the Commonwealth filed a

petition for contempt against Highmark contending, inter alia, that Highmark had

breached the vulnerable populations clause of its Consent Decree, which, as discussed

above, is identical to that contained in UPMC’s decree. The matter was assigned to

Judge Pellegrini for disposition, and he rejected this contention as being unsupported by

the plain language of the terms of the vulnerable populations clause:


             Nowhere in the text of the [vulnerable populations clause]
             provision is there a requirement that Highmark include
             UPMC in all of its Medicare-Advantage products. Further,
             while [the vulnerable populations clause] requires UPMC to
             continue contracting with Highmark at in-network rates for
             CHIP, Highmark Signature 65, Medigap, and commercial
             retiree carve-out programs, it does not impose such

11  UPMC thereafter filed preliminary objections to this complaint, accompanied by a
motion to compel arbitration based on its contention that Highmark’s claims were
subject to mandatory arbitration under arbitration provisions in the contracts at issue. In
response, Highmark filed a petition to stay arbitration. The trial court overruled UPMC’s
preliminary objections and granted Highmark’s petition. UPMC subsequently appealed
this decision, and that appeal remains pending in the Superior Court.



                                     [J-77-2015] - 14
              requirements with regard to the Community Blue Program or
              future products.    Although the [vulnerable populations
              clause] requires UPMC to ‘treat’ all participating Medicare
              beneficiaries as in-network, it does not impose any
              corresponding requirement on Highmark to provide for such
              in-network care, and we are unwilling to impose such a
              requirement where none exists.

Commonwealth Court Opinion, 10/30/14, at 17-18.

       Thereafter, “serial disputes” continued between the parties over compliance with

the decrees which the Commonwealth attempted to mediate, pursuant to the Consent

Decrees, but to no avail. Commonwealth Petition to Enforce Consent Decree, filed

4/27/15, at 2-3.

       On March 20, 2015, UPMC informed Highmark and the Pennsylvania Insurance

Department that it would terminate all of its Medicare Advantage hospital contracts on

December 31, 2015 based on Highmark’s assertion in its Allegheny County lawsuit that

it had the right to change the rates under its contracts with UPMC for the administration

of the oncology drugs and its claim that UPMC had overcharged it for that and other

medical services from August 2010 forward. UPMC claimed that the language of the

vulnerable populations clause gave it the right to engage in such unilateral termination.

In response, the Commonwealth filed with the Commonwealth Court a motion to

enforce the Consent Decrees which was the genesis of the litigation spawning the

instant appeal.

       On May 27, 2015, Judge Pellegrini conducted a ten-hour hearing on this motion.

In order to determine UPMC’s obligations with respect to Highmark’s Medicare

Advantage programs, Judge Pellegrini received extensive testimony describing the

general characteristics and function of Medicare Advantage programs in delivering




                                    [J-77-2015] - 15
health care to seniors, and the coverage of the specific Highmark Medicare Advantage

programs at issue in this case. In this regard, he heard from Darlene Sampson, who is

the   Director   of     the   Pennsylvania   Department   of   Aging’s   Apprise   Program,

Pennsylvania’s state health insurance assistance program, in which capacity she was

responsible for educating Medicare beneficiaries and assisting them in understanding

Medicare coverage. N.T. Hearing, 5/27/15, at 41, 43. Sampson described the structure

of the federal Medicare Program as consisting of four parts — A through D — with Part

A providing coverage for hospital services, Part B providing coverage for outpatient and

physician services, Part C establishing the Medicare Advantage Programs, and Part D

providing prescription drug coverage. Id. at 53. Sampson explained that, if an individual

is enrolled in Medicare Advantage, he or she is still considered to be a part of the

federal Medicare program and receives Medicare Part A and B benefits through the

Medicare Advantage program. Id. at 66. Sampson testified that the principal difference

between the traditional Medicare Part A and B programs and Medicare Advantage is in

how the plans are administered: when an individual receives Medicare Part A and B, the

federal government manages the administration of the Medicare benefits, whereas a

Medicare Advantage program is run by a private insurance company which contracts

with the federal government (the Centers for Medicare and Medicaid Services (“CMS”)),

and the insurance company manages the administration of Medicare benefits and pays

claims. Id. at 53-54.

       The Commonwealth also called Barbara Gray — Highmark’s Senior Vice

President of Senior Markets — who is responsible for Highmark’s Medicare Advantage

and Medigap insurance products. She agreed with Sampson’s description of the




                                       [J-77-2015] - 16
Medicare Advantage program, opining that it is “a type of Medicare product,” and that “if

you’re in Medicare Advantage you’re still covered by Medicare and you’re afforded all

the rights and privileges and protections . . . of Medicare.” Id. at 82. Gray testified

further that those who are enrolled in Medicare Advantage plans are members of

Medicare, and that such Medicare Advantage programs are required to provide, at a

minimum, the same benefit amounts which are provided by Medicare Parts A and B.

Gray noted that, frequently, Medicare Advantage programs furnished a greater

monetary benefit value to an enrollee; however, Medicare Advantage programs also

restrict a participant’s choice of hospital or doctor to those who are part of networks

specified by the insurer administering the plan.12 Id. at 108-09.

      Gray noted that Highmark offered two types of Medicare Advantage plans which

had UPMC hospitals in their networks: Security Blue, which is an HMO that pays no out-

of-network benefits, and Freedom Blue, which is a Preferred Provider Organization

(“PPO”) offering some out-of-network coverage under which members pay the

difference between the, lower, covered amount and the actual cost of treatment.13 Id. at

98. Gray related that such plans automatically renew each year unless the plan

participant takes affirmative steps to change them, and she estimated that there are

approximately 145,000 current subscribers to both plans. Id. at 103.


12 The insurer offering such Medicare Advantage plans is required to submit information
regarding the plan to CMS for initial approval, and annual bids detailing policy and rate
changes. Such plans must describe the physicians and hospitals, which will be part of
the plan’s network. Commonwealth Court Opinion, 6/29/15, at 16; N.T. Hearing,
5/27/15, at 83-84.
13Highmark continues to offer Community Blue which does not include UPMC within its
network of hospitals.



                                     [J-77-2015] - 17
       On this matter, UPMC presented the testimony of the only witness it called at the

hearing — Shawn Maree Bishop, the owner of a Washington D.C. based consulting firm

which provides representation to organizations and companies which use Medicare

Advantage plans, and companies which perform outsourced services for such plans. Id.

at 318. Bishop, who was qualified as an expert based on her work as a consultant and

prior service in the federal government, including for CMS, opined that, while it was true

that Medicare Advantage was part of the Medicare program, it was a distinct program

governed by different statutes and regulations, and that a person could not have

traditional Medicare and Medicare Advantage at the same time. Id. at 323-24. She

testified that she had not encountered the terms “Medicare participating consumers” in

the Medicare statutes or regulations, but opined that this phrase meant traditional

Medicare, not Medicare Advantage, and that she viewed the requirement of the

vulnerable populations clause requiring “Medicare participating consumers” to be

treated as “in-network” to refer to a commercial insurance product which is not part of

the Medicare program. Id. at 328-29, 331. Bishop acknowledged that, under Medicare

Advantage, the reimbursement rates are negotiated directly between the insurer and the

provider; whereas, under Medicare Part A and B, CMS sets the reimbursement rates.

Hence, if a provider chooses to participate in the Medicare Part A and B program, those

are the rates which it receives, and there is no negotiation. Id. at 359.

       None of these witnesses — Sampson, Gray, or Bishop — participated in the

negotiation of the Consent Decree. The only witness who participated in that process,

and testified as to the circumstances surrounding the choice of its language, was

Deborah Rice-Johnson, the President of Highmark. She testified that the vulnerable




                                     [J-77-2015] - 18
populations clause was structured in the manner in which Highmark had proposed it —

as including Medicare Advantage members within the definition of all Medicare

participating consumers so that they would be treated in-network. Id. at 208. President

Rice-Johnson testified that the vulnerable populations clause was the subject of

extensive back and forth negotiations between the parties, and that the second

sentence of that clause had originally included Medicare Advantage, but that Highmark

requested that program be deleted from that sentence because Highmark wanted to

ensure that it was protected if it offered other Medicare Advantage programs such as its

Community Blue program.       Id. at 210-11, 215.      Rice-Johnson indicated that her

understanding of the term “Medicare participating consumers” in the third sentence

during the negotiations was that it included all of Highmark’s Medicare members, i.e.,

those of its customers in Medicare Advantage contracts with Highmark, and not those

individuals enrolled in Medicare Parts A and B, for which Highmark has no contractual

relationship. Id. at 255, 274-75. Consequently, in her view, because the third sentence

of the vulnerable populations clause obligated UPMC to treat all Medicare participating

consumers as “In-Network,” and the Consent Decree further defined “In-Network” as

when a health care provider “has contracted” with the insurer to provide health care

services at negotiated rates, this sentence required UPMC to be in contract with

Highmark for the duration of the Consent Decree. Id. at 215, 270, 273-74.          Rice-

Johnson further testified that, because the term “In-Network” refers to negotiated rates,

and because the government does not negotiate rates for Medicare Part A and B, this

term has no meaning as applied to Medicare Part A and B. Id. at 273-74.




                                    [J-77-2015] - 19
       Rice-Johnson also testified regarding the impact of the Allegheny County lawsuit.

She claimed that this complaint addressed the period of time prior to March 14, 2014,

and it was not an effort to change the rates that it would be required to pay UPMC under

Medicare Advantage from January 1, 2016 forward, as such rates would be set by

binding arbitration under the terms of the Consent Decree. She noted that Highmark

had claimed only that it had the right to change fee schedules under the provider

agreements in April 2014, when those agreements were renewed with those changed

fee schedules, but she denied that Highmark took the position that it had the right to

change such rates under the Medicare Advantage contracts during the term of the

Consent Decree. She testified that Highmark viewed the Consent Decree as limiting its

ability to make any further such changes: “Once we entered into the arrangement with

the Consent Decree, that limited our ability to do so. So during the period of the

Consent Decree forward, we will not change rates unless they are mutually agreed

upon or agreed through arbitration.” Id. at 186. She further stated, “[o]nce we entered

into the Consent Decree, we agreed we would not change fee schedules until the end of

that Consent Decree.” Id. at 198. President Rice-Johnson also related that Highmark

considered the arbitration clause in the Consent Decree as preserving the right for

Highmark and UPMC to arbitrate the question of whether Highmark was entitled to

make the change in the oncology fee schedules in 2014. Id. at 221, 256-57.

       Two days after the hearing, on May 29, 2015, based on the filings and responses

of the parties and the evidence presented at the hearing, Judge Pellegrini issued an

order granting the Commonwealth’s Motion to Enforce the Decree in which he made the

following findings and directives to the parties:




                                      [J-77-2015] - 20
                              ORDER

WHEREAS, the parallel consent decrees entered into by the
parties with the Commonwealth are only at issue in this
matter;

WHEREAS, I find that Medicare Advantage participants are
included within the definition of "Medicare participating
consumers" in the third sentence of the Vulnerable
Populations' paragraph of UPMC's consent decree, UPMC
consent decree §IV(A)(2);

WHEREAS, I find that Highmark did not take the position
that it had the authority to unilaterally revise the rates and
fees payable to UPMC after June 27, 2014, the date the
consent decrees were executed, and did not revise any rates
paid to UPMC;

WHEREAS, I find that Highmark did not violate the fourth
sentence of the Vulnerable Populations' paragraph of the
consent decrees. See UPMC consent decree §IV(A)(2); see
also Id. §IV(C)(1)(a)(ii);

       AND NOW, this 29th day of May, 2015, upon
consideration of the Commonwealth's Motion to Enforce
Consent Decrees and Compel Arbitration and Respondents'
replies thereto, the evidence presented at the hearing on
May 27, 2015, and the findings that I have made, the
Commonwealth's Motion is granted.

It is further ordered that:

       1. Respondent UPMC shall be in a contract with
       Highmark Health and Highmark, Inc. (collectively,
       Highmark) and be an in-network provider for
       Highmark Medicare Advantage Plans for physicians,
       hospitals, and other services for the term of the
       consent decrees.

       2. If the parties are unable to negotiate terms for
       payment owed by Highmark to those entities or other
       terms and conditions of the Plans:

             A. By July 1, 2015, Respondents shall submit a
       joint statement identifying all remaining and
       unresolved issues to be determined pursuant to the



                         [J-77-2015] - 21
                     UPMC-Highmark Joint Plan for Single Last Best Offer
                     Arbitration under Consent Decrees entered separately
                     with the Commonwealth of Pennsylvania as approved
                     by this Court's November 24, 2014 Order.

                             B. By the same date, the Respondents shall
                     select an arbitrator in a manner provided for in the
                     November 24, 2014 Order, or the Court will select the
                     arbitrator.

                          C. Respondents shall complete the arbitration
                     of outstanding issues identified no later than
                     September 30, 2015.

                             D. Respondents shall provide this Court and
                     the Commonwealth with monthly status reports
                     commencing on July 1, 2015, and continuing until the
                     arbitration decision is rendered.

                     3. Neither Respondent shall make any changes to
                     any Plan, contract, or other business relationship
                     between UPMC and Highmark Health/Highmark, Inc.,
                     no matter how small, without first securing approval
                     from the Court.

                     4. The Commonwealth will file a request for
                     supplemental relief to effectuate compliance with the
                     consent decrees, including but not limited to, changes
                     in corporate governance.

Order, 5/29/15, at 1-3.

       In his opinion accompanying this order, Judge Pellegrini explained his

interpretation of the third sentence of the vulnerable populations clause as establishing

a duty on the part of UPMC to treat Highmark customers as “in-network” for the duration

of the Consent Decree:14



14 In his opinion, Judge Pellegrini also found that the second sentence of the vulnerable
populations clause “extends UPMC’s in-network contracting duties to the [Medicare
Advantage] Plan,” Commonwealth Court Opinion, 6/29/15, at 27, however, neither
Highmark nor the Commonwealth advances this contention in the present appeal.
(continuedB)

                                    [J-77-2015] - 22
             I disagree that the phrase ‘Medicare participating
             consumers’ in the third clause must be interpreted as
             excluding [Medicare Advantage] participants. Doubtlessly, as
             the testimony establishes, there are significant similarities
             and differences between Highmark’s [Medicare Advantage]
             Plan and original Medicare. Notably, however, the consent
             decree does not limit UPMC’s provision of in-network service
             to ‘Medicare’ participants, but rather, provides that such
             services must be provided to ‘all Medicare participating
             consumers,’ which encompasses [Medicare Advantage]
             participants. Had the drafters intended to limit UPMC’s duty
             to give in-network treatment only to Medicare participants, it
             easily could have stated ‘Medicare’ instead of ‘Medicare
             participating consumers’ as it does in the first sentence.
             However, the first sentence groups together Medicare and
             [Medicare Advantage] participants, and this grouping re-
             appears as the phrase ‘Medicare participating consumers’ in
             the third sentence. Critically, if I construe the third sentence
             to apply only to Medicare participants, the provision would
             purport to establish via contract original Medicare
             participants’ in-network access rights to UPMC. Yet, the
             parties agree that these rates are set exclusively by CMS
             and cannot be abrogated by private contract. Therefore,
             under UPMC’s reading of the third sentence, the provision
             sets forth UPMC’s already-existing duty to treat Medicare
             participants as in-network, rendering it superfluous at best,
             and insofar as it purports to negotiate the CMS rates, illegal.
             (See UPMC consent decree § (II)(I)(defining ‘in-network’)).

Commonwealth Court Opinion, 6/29/15, at 27-28.           In making this finding, Judge

Pellegrini did not credit the testimony of Bishop as it pertained to the interpretation of

the phrase “Medicare participating consumers.” He noted that she was not an expert in

the field of contract interpretation, and that she acknowledged that, in her experience in



(Bcontinued)
Consequently, for reasons we explain, infra, because we consider UPMC’s obligations
to Highmark’s Medicare Advantage customers to be established by the third sentence of
the vulnerable populations clause, which Judge Pellegrini cited in his order as the basis
for granting relief, we need not address Judge Pellegrini’s analysis of the second
sentence.



                                    [J-77-2015] - 23
the field of Medicare, “Medicare participating consumer” was not a term of art that had

acquired a special meaning.

       In his opinion, Judge Pellegrini also rejected UPMC’s argument that his prior

interpretation of this clause in his October 30, 2014 opinion had already decided this

question.   He reasoned that he was construing Highmark’s obligation under this

provision, not UPMC’s; thus, it did not control the question of UPMC’s duties under this

clause. He pointed out that in the previous opinion he expressly found that the third

sentence of the vulnerable populations clause, “which governs the present issue

‘requires UPMC to ‘treat’ all participating Medicare beneficiaries as in-network,” but did

not impose a corresponding obligation on Highmark. Commonwealth Court Opinion,

6/29/15, at 29. By contrast, Judge Pellegrini found that the present dispute concerned

only UPMC’s duties under the first and third sentences of the clause. Nevertheless, he

considered his present interpretation and his prior one to be consistent “insofar as both

recognize UPMC’s duty, under the third clause to treat all Medicare participating

consumers as in-network.” Id. at 30. Moreover, he observed, “[t]he instant opinion,

however, goes a step farther in defining ‘Medicare participating consumers’ to include

the beneficiaries of [Medicare Advantage] contracts.” Id. at 30.

       Additionally, Judge Pellegrini rejected UPMC’s argument that it was permitted to

terminate the Medicare Advantage agreements under the fourth sentence of the

vulnerable populations clause due to the Allegheny County lawsuit. He found that the

Consent Decrees specifically addressed this dispute through the arbitration clause in

Section IV(C)(1)(a)(ii) set forth above:

                     There can be no doubt that the dispute referenced in
              this section, and the rates being arbitrated at the time the



                                      [J-77-2015] - 24
              consent decrees were entered, were the oncology rates. At
              the time the consent decrees were executed, UPMC’s initial
              arbitration demand concerning oncology rates was pending
              before the AHLA. Further, it is undisputed that Highmark
              effectuated its revised rates on April 1, 2014. The
              [arbitration] provision above makes clear that if Highmark is
              unsuccessful at arbitration concerning the oncology rates,
              the rates must revert to those in place before Highmark’s
              unilateral revision and Highmark must pay interest on the
              outstanding amounts.

Id. at 31. Judge Pellegrini found that this provision must be construed together with the

vulnerable population’s clause to reflect the parties’ intent that Highmark be able to

resolve, through the arbitration process, the question of whether it was entitled to

change the oncology fee schedules in April 2014.

       In response to UPMC’s allegation in a motion for an emergency stay filed with

our Court, that Judge Pellegrini had appointed himself “Health Care Czar of Western

Pennsylvania” through the inclusion of paragraphs 3 and 4 of his order, Judge Pellegrini

denied that he had arrogated such plenary authority. He explained that his order did not

require his review of every aspect of the business relationship between Highmark and

UPMC, but, rather, was confined only to precluding Highmark and UPMC from “altering

without court approval their contracts and business relationships that involve matters

within the scope of the consent decrees, over which this Court retains jurisdiction.” Id at

34-35. Judge Pellegrini deemed this appropriate, given the fact that the current dispute

affected nearly 180,000 Blue Cross subscribers, and that, in his view, given the parties’

contentious history, “such a directive is ‘necessary and appropriate for the . . .

enforcement’ of the consent decrees, particularly with regard to the vulnerable

populations who, as the testimony established, are the true casualties of the ongoing

dispute.” Id. at 35.



                                     [J-77-2015] - 25
      As for the fourth paragraph of his order which instructs the Commonwealth to file

a request for supplemental relief in order to effectuate compliance with the Consent

Decree, including seeking changes in corporate governance, if warranted, he viewed

that directive as consistent with both the vulnerable populations provision of the

Consent Decrees, and the other Consent Decrees provisions giving the Commonwealth

enforcement power and the Commonwealth Court continuing jurisdiction to effectuate

compliance with the decree. Moreover, he deemed such action to be consistent with

provisions of the Non-Profit Corporation Law, which place upon the director of such

corporations the duties of a trustee as if the charity was not incorporated, 15 Pa.C.S.

§ 5547(a), and which allow the removal of directors of such corporations, 15 Pa.C.S.

§ 5726.

      UPMC appealed Judge Pellegrini’s order and requested expedited review.

Because of the importance of the resolution of the questions raised by this appeal to the

people of the Commonwealth affected by this dispute, we granted that request. In its

appeal, UPMC presents three issues for our consideration:

             1. Did the Commonwealth Court erroneously interpret [the
             vulnerable populations clause] of the Commonwealth/UPMC
             Consent Decree to require UPMC to “be in a contract with
             Highmark” as to Medicare Advantage, where the plain
             language of the consent decree — as confirmed by the
             drafting history, parties’ admissions, and a prior
             interpretation of the same provision by the same judge of the
             Commonwealth Court — preserves the parties’ ability to
             terminate their Medicare Advantage contracts with each
             upon proper notice?

             2. Did Highmark “take the position” that it has authority to
             unilaterally and materially revise the rates and fees payable
             under its Medicare Advantage contracts with UPMC under
             [the vulnerable populations clause] of the Consent Decrees
             — thereby triggering, inter alia, UPMC’s right to withdraw



                                    [J-77-2015] - 26
             from Medicare Advantage provisions of the Consent
             Decrees — where, among other things, both the
             Commonwealth and Judge Pellegrini admitted that Highmark
             had indeed taken that position?

             3. Did the Commonwealth Court violate due process by
             ordering sweeping relief that no party requested, that was
             expressly released by the Consent Decrees, and that
             exceeded the Court’s constitutional authority?

UPMC Brief at 5-6.15 We consider these issues seriatim.

                                     II. Issue One

      UPMC first argues that the Commonwealth and Highmark have, since the time of

the execution of the Consent Decree, demonstrated through their actions that the

vulnerable populations clause of the Consent Decree allows it to terminate its Medicare

Advantage contracts at any time. Specifically, UPMC claims that Highmark

acknowledged UPMC’s right to terminate its Medicare Advantage contracts in its

transition plan filed with the Insurance Department when it admitted that “[t]he current

broad network contracts with UPMC extend until December 31, 2015 and renew

annually unless either party provides prior notice.” UPMC Brief at 32 (citing Highmark

Transition Plan at 1(a)). UPMC refers to an internal strategy discussion by Highmark

Senior Vice President Gray in which she discussed the impact the terminations would

have on their business. According to UPMC, the fact that Gray discussed this fact was

evidence of Highmark’s belief that UPMC had the right to execute such a termination.

UPMC also cites a March 13, 2015 letter from the Chief Legal Officer of Highmark,


15  We have jurisdiction over this appeal from the order below pursuant to Pa.R.A.P.
311(a)(4) (“An appeal may be taken as of right . . . from . . . An order that grants or
denies, modifies or refuses to modify, continues or refuses to continue, or dissolves or
refuses to dissolve an injunction.”).



                                    [J-77-2015] - 27
Thomas Van Kirk, to the Chief Legal Officer of UPMC, Thomas McGough, in which it

agreed to refrain from making unilateral changes to rates and fees in its Medicare

Advantage contracts if UPMC agreed to keep them in effect for the duration of the

Consent Decree.

      UPMC also claims, as evidence of the Commonwealth’s belief that UPMC

possessed the right to terminate the Medicare Advantage agreements, that when it

made the Commonwealth aware of its intention to terminate the Medicare Advantage

contracts in the fall of 2014, the Commonwealth never responded to those letters. Also,

UPMC points to a preliminary internal draft of a press release prepared by the

Insurance Department in which the department’s press secretary stated that the

Medicare Advantage contracts could be terminated at the end of 2015.

      Turning to the language of the vulnerable populations clause itself, UPMC notes

that Medicare Advantage is not contained within the enumerated list of programs set

forth in the second sentence of that clause and that this omission was purposeful since

Highmark wanted the option to introduce its new Community Blue HMO at the time it

was negotiating the Consent Decree; hence, in UPMC’s view, this sentence did not

compel it to continue its Medicare Advantage contracts with Highmark. UPMC points to

the fact that the Consent Decree provides that it is not to be construed as a contract

extension. UPMC Brief at 37 (quoting Consent Decree at I (A)). With respect to the third

sentence of the vulnerable populations clause, UPMC argues that it appears as it did

throughout the original negotiations of the Consent Decrees; thus, it contends that the

absence of any change to the phrase “Medicare participating consumers” indicated the

parties’ intent to give that term its original meaning — i.e., traditional Medicare as used




                                     [J-77-2015] - 28
in the first sentence of the vulnerable populations clause. UPMC points out that

Medicare and Medicare Advantage are defined separately in that sentence, and, if

Medicare and Medicare Advantage were to be considered to be the same program,

then there would have been no need to define them separately. UPMC argues that the

term Medicare cannot be given different meanings in adjacent sentences. In UPMC’s

view, construing Medicare and Medicare Advantage distinctly would be consistent with

how the federal government treats both programs since they are created by different

statutes and are governed by different regulations, and a subscriber cannot be in both

programs at once.

       UPMC instead suggests that the third sentence of the vulnerable populations

clause is, in actuality, a coordination of benefits clause intended to cover situations

when an employee is covered by two medical plans, one which is commercial

insurance, and the other which is Medicare. In such situations, the commercial

insurance can either be the primary or secondary payer to Medicare depending on the

size of the business.16 The effect of this clause, according to UPMC, is to require that all

Medicare participants be in-network whether or not Medicare is a primary or secondary

payer. UPMC avers that Highmark acknowledged the effect of this clause at the

hearing.



16 See generally, U.S. Department of Health and Human Services, Medicare and Other
Health Benefits: Your Guide to Who Pays First, at 6, 12 (explaining that, for those 65
and older who work for an employer with 20 or more employees the commercial group
health insurance plan pays first and Medicare is a secondary payer; whereas, if the
employer has less than 20 employees, Medicare is the primary payer and the group
health plan is the secondary payer); Testimony of Shawnee Bishop, N.T. Hearing,
5/27/15, at 324-27.



                                     [J-77-2015] - 29
      Further, UPMC claims that it would be illogical to read this sentence as creating

an obligation to treat Medicare Advantage members as “In-Network” and then restrict, in

the second half of the sentence, coordination of benefits to only those in the traditional

Medicare program. UPMC claims that Judge Pellegrini improperly disregarded the effect

of the second part of the sentence by his interpretation. UPMC further avers that, if all

Medicare related programs are included within “Medicare participating consumers,”

such as Medigap, which is also a Medicare related program, then it would render

coordination of benefits impossible as a matter of law. UPMC maintains that it is

inconsistent for Judge Pellegrini to interpret the vulnerable populations clause as

requiring UPMC to contract with Highmark with all Medicare Advantage products, when

he ruled previously that Highmark was under no obligation to contract with UPMC for its

Community Blue plan.

      Highmark responds that the Consent Decree is a contract between it and UPMC;

hence, it must be interpreted in accordance with fundamental contract law principles,

namely, that all of the provisions of a contract must be considered in light of the purpose

of the contract and construed in a manner which gives effect to all of those provisions.

Highmark stresses that the vulnerable populations clause, when read together with the

Consent Decree as a whole, had the core purpose of ensuring that Highmark Medicare

Advantage customers could continue to access UPMC providers on an in-network

basis, as they had done in the past, until the expiration of that decree. Highmark argues

that Judge Pellegrini properly recognized that the fundamental purpose of the

negotiation and entry of the Consent Decree was to ensure that vulnerable populations,

such as senior citizens, would be provided with medical services, and the Consent




                                     [J-77-2015] - 30
Decree served to lessen the anxiety of those vulnerable populations who were

Highmark subscribers by securing in-network access to UPMC physicians and facilities

until 2019.

       Highmark avers that the multiple sentences contained in the vulnerable

populations clause should, therefore, be read as a whole to fulfill that purpose. In

Highmark’s view, the first sentence of the vulnerable populations clause, by specifying

that vulnerable populations include those seniors who have or are eligible for Medicare

Advantage, serves to indicate that the protections of the vulnerable populations clause,

as a whole, are extended to those in Highmark’s Medicare Advantage programs,

inasmuch as Medicare Advantage members are considered to be participating in the

Medicare program under federal law — a fact acknowledged by the Medicare program

itself on its website www.medicare.gov. Highmark contends that the third sentence of

the vulnerable populations clause serves the purpose of providing that protection to

these individuals “by requiring UPMC to treat ‘all Medicare participating consumers,’

which includes Medicare Advantage members, as In-Network.” Highmark Brief at 28.

Highmark avers that, because “In-Network” is defined by the Consent Decree as when

UMPC “has contracted with” Highmark, this imposes an obligation on UPMC to be in a

Medicare Advantage contract with Highmark. Id.

       Highmark disputes that UPMC’s reliance on the Consent Decree’s statement that

it is not a contract extension excuses it from its obligation to continue to provide in

network access to UPMC facilities for certain categories of its customers. Highmark

contends that the Consent Decree requirements “trumped” any termination rights




                                    [J-77-2015] - 31
contained in the existing individual contracts it had with UPMC as, in its view, “that was

the whole point of the Consent Decree.” Highmark Brief at 30.

      Highmark next contends that UPMC’s reading of the third sentence of the

vulnerable populations clause as defining Medicare participating consumers as only

those enrolled in traditional Medicare, but not in Medicare Advantage, would, if

accepted, result in the sentence having no meaning with respect to Highmark since the

“In-Network” requirement of that section contemplates a contract between a health plan

and a provider to provide services for reimbursement, but traditional Medicare is paid

directly by the federal government to the provider for performing health care services

and does not involve any contract by Highmark with a health care provider. Rather,

Highmark considers it as having meaning if applied to Medicare Advantage, as such a

program fits within the definition of “In-Network” under the Consent Decree, because it

is a contract between it and UPMC to provide health care services for reimbursement.

      Regarding UPMC’s argument that Judge Pellegrini improperly disregarded the

last portion of the third sentence which, in UPMC’s view, demonstrated that this

sentence was a coordination of benefits clause, Highmark posits that, even if the last

portion of the sentence were interpreted to function in the capacity of a coordination of

benefits clause, it does not change the plain meaning of the language of the entire

sentence, which establishes UPMC’s obligation to treat all Medicare participating

consumers as in-network. Moreover, Highmark points out that, under relevant federal

regulations, see 42 C.F.R. § 422.108 (establishing secondary payment procedures for

Medicare Advantage when “Medicare is not the primary payer.”), Medicare Advantage

can function as either the subscriber’s primary or secondary insurance; thus, the third




                                    [J-77-2015] - 32
sentence cannot be construed as being limited to only traditional Medicare. Highmark

Brief at 33.

       Highmark also rejects UPMC’s contention that the second sentence of the

vulnerable populations clause, which requires it to continue to contract, is the exclusive

source of its obligations under the vulnerable populations clause, since that

interpretation disregards the third sentence entirely. Highmark proffers that the second

sentence of the vulnerable populations clause enumerates programs, which are not

Medicare programs, such as CHIP, Highmark 65, and Medigap, and that sentence

requires UPMC to be in a contract for those programs, whereas the third sentence

requires UPMC to be in a Medicare Advantage contract with Highmark. Highmark

highlights that, as Rice-Johnson’s testimony showed at the hearing, the reason that

Medicare Advantage was deleted from the second sentence was so that it could offer its

Community Blue program without being accused of making a unilateral change to its

Medicare Advantage program in violation of the restrictions of that sentence. Highmark

asserts that, in making this deletion, it had no intention to exclude the subscribers to its

existing Medicare Advantage programs — Security Blue and Freedom Blue – from the

protections of the vulnerable populations clause, and that it considered those

subscribers to still be protected under the third sentence of the clause.

       Highmark disputes that it ever engaged in any course of conduct that indicated

that it acquiesced in UPMC’s interpretation of the vulnerable populations clause. It

describes UPMC’s assessment of the statements in question made in reports and

correspondence by its employees as being “cherry-picked” and taken out of context. It

argues that, when these materials are examined in their entirety, they reveal no




                                     [J-77-2015] - 33
admissions or conduct by Highmark indicating its agreement with UPMC’s interpretation

of the vulnerable populations clause.

      In its brief, the Commonwealth aligns entirely with Highmark’s interpretation of

the vulnerable population’s clause. The Commonwealth avers that the term “Medicare

participating consumer” is, as Judge Pellegrini recognized, not a term of art; hence, in

the Commonwealth’s view, it should be given its ordinary and accepted meaning — that

is, a consumer who participates in the Medicare program. The Commonwealth agrees

with Highmark that those who subscribe to a Medicare Advantage policy are

participating in the federal Medicare program and that they have the same rights and

protections as those who are enrolled in Medicare Parts A and B. The Commonwealth

disputes that Medicare Advantage is a distinct program as UPMC has contended,

pointing out that Medicare Advantage is statutorily designated Part C of the Medicare

program; therefore, it must be viewed, along with parts A and B of Medicare, as a

“distinct part of the same program.” Commonwealth Brief at 27.

      The Commonwealth rejects UPMC’s assertion that the last clause of the third

sentence — “whether they have Medicare as their primary or secondary insurance” —

renders the entire sentence as only a coordination of benefits clause. The

Commonwealth asserts that this would be inconsistent with the plain meaning of

Medicare that includes all of its individual parts. Moreover, the Commonwealth stresses

that such a reading would be inconsistent with the entire purpose of the Consent

Decree. As the Commonwealth describes this purpose:

             The whole purpose of the consent decree — the reason why
             the Commonwealth got involved in this corporate spat in the
             first place — is to protect the consumers who might be
             injured by it. The first sentence of the Vulnerable Populations



                                    [J-77-2015] - 34
              provision expressly includes Medicare Advantage members
              as part of that vulnerable population; and yet, according to
              UPMC, the provision then goes on to exclude them from any
              protection whatsoever. UPMC does not attempt to explain
              what purpose would be served by such a provision, and
              none comes to mind.

Commonwealth Brief at 28 (emphasis original). The Commonwealth also endorses

Judge Pellegrini’s conclusion that, if the terms Medicare participating consumer are

construed as excluding Medicare Advantage members, then the clause is meaningless

and illegal since the rates for Medicare are “set exclusively by CMS and cannot be

abrogated by private contract.” Id. at 29.

       The Commonwealth argues that the extrinsic evidence relied on by UPMC

involving Highmark’s course of performance should not be considered since the

contract is, in its view, not ambiguous, and UPMC makes no argument that it is.

Further, even if the Consent Decree were to be considered ambiguous, then its

meaning is a question of fact which is properly resolved by the finder of fact, and the

Commonwealth Court below rejected UPMC’s arguments.

       In any event, the Commonwealth maintains that UPMC’s evidence does not

support the conclusion that Medicare Advantage members were not intended to be

protected under the Consent Decree. The Commonwealth notes that any statements by

Highmark subsequent to the entry of the decree do not bind the Commonwealth.

Moreover, the Commonwealth points out that Highmark, at UPMC’s insistence, is not a

party to its own Consent Decree. With respect to the transition plan filed with the

Insurance Department, the Commonwealth characterizes it as a general description of

Highmark’s business relationships with UPMC and does not speak to the meaning of

the vulnerable populations clause. As for its lack of response to UPMC’s letters in the



                                     [J-77-2015] - 35
Fall of 2014 in which it expressed the view that Highmark had triggered UPMC’s right to

withdraw from the Consent Decrees, the Commonwealth asserts that it was under no

obligation to respond to every letter from UPMC indicating that it was “evaluating” taking

a particular course of action. The Commonwealth denies that it ever accepted UPMC’s

contention that it had the right to withdraw from the Consent Decrees, and that its non-

response to those letters cannot be construed as a formal legal agreement with UPMC’s

contention in this regard.

       As the parties and the Commonwealth Court have recognized, a consent decree

is a contract which has been given judicial sanction, and, as such, it must be interpreted

in accordance with the general principles governing the interpretation of all contracts.

Int'l Org. Master, Mates & Pilots of Am., Local No. 2 v. Int'l Org. Masters, Mates & Pilots

of Am., Inc., 439 A.2d 621, 624-25 (Pa. 1981). In interpreting the terms of a contract,

the cardinal rule followed by courts is to ascertain the intent of the contracting parties.

Lesko v. Frankford Hosp.-Bucks Cnty., 15 A.3d 337, 342 (Pa. 2011). If the contractual

terms are clear and unambiguous on their face, then such terms are deemed to be the

best reflection of the intent of the parties. Kripp v. Kripp, 849 A.2d 1159, 1162 (Pa.

2004). If, however, the contractual terms are ambiguous, then resort to extrinsic

evidence to ascertain their meaning is proper.   Murphy v. Duquesne Univ. of the Holy

Ghost, 777 A.2d 418, 429 (Pa. 2001). A contract’s terms are considered ambiguous “‘if

they are subject to more than one reasonable interpretation when applied to a particular

set of facts.’” Id. at 430.

       In the present matter, and as our threshold determination, the term “Medicare

participating consumers” used in the vulnerable populations clause of the Consent




                                     [J-77-2015] - 36
Decree cannot be considered clear and unambiguous, as evidenced by the disparate

interpretations advanced by the parties in this matter, each of which, taken on its face,

can be considered reasonable. Thus, given the ambiguity of these terms, as applied to

the Medicare Advantage policies at issue,17 it was proper for Judge Pellegrini to take

evidence on the question of the meanings of these terms and to rely on such evidence

in interpreting these terms.18 See Int'l Org. Master, Mates & Pilots, 439 A.2d at 624 (in

ascertaining the meaning of the terms of a consent decree, a court “may take into

consideration the surrounding circumstances, the situation of the parties, the objects

they apparently have in view, and the nature of the subject-matter of the agreement”).

To the extent that the court’s findings of fact and credibility determinations are

supported by the record, we will defer to them. Messina v. East Penn Township, 62

A.3d 363, 366 (Pa. 2012). However, we review the court’s legal conclusions de novo.

Id.

       In addition, our review is guided by certain principles, or canons, of contract

interpretation. See Hutchison v. Sunbeam Coal, 519 A.2d 385 (Pa. 1986) (construing

ambiguous language of a contract through examination of extrinsic evidence and the

application of canons of interpretation). Four such principles, some of which, as

discussed above, have been referenced by the parties in their arguments, are

applicable to the instant case. First, “the entire contract should be read as a whole . . .


17 These are the two Highmark Medicare Advantage plans in existence at the time the
consent decree was entered into — Security Blue and Freedom Blue — which include
UPMC as an “in-network” provider.
18 See Commonwealth Court Order, 5/29/15, at 2 (resting determination “upon
consideration of . . . the evidence presented at the hearing”).



                                     [J-77-2015] - 37
to give effect to its true purpose.” Pritchard v. Wick, 178 A.2d 725, 727 (Pa. 1962).

Second, a contract must be interpreted to give effect to all of its provisions. Murphy,

777 A.2d at 429. Thus, our Court “will not interpret one provision of a contract in a

manner which results in another portion being annulled.”         LJL Transp. v. Pilot Air

Freight, 962 A.2d 639, 648 (Pa. 2009). Third, “a word used by the parties in one sense

is to be interpreted as employed in the same sense throughout the writing in the

absence of countervailing reasons,” such as thwarting the intent of the agreement.

Maloney v. Glosser, 235 A.2d 607, 609 (Pa. 1967). And, finally, a party’s performance

under the terms of a contract is evidence of the meaning of those terms. Atlantic

Richfield v. Razumic, 390 A.2d 736, 741 (Pa. 1978).


        In considering the entirety of the evidence of record surrounding the formation of

the Consent Decrees to discern their true purpose, it is abundantly clear, based on the

history of the contentious interactions between the parties recited above, that the

Commonwealth specifically intended them to provide a measure of enduring certitude

and security for health care consumers who were members of certain Highmark health

care plans, that they would not incur significant costs in seeking treatment at UPMC

facilities if UPMC followed through on its promise to terminate provider contracts for

these plans at the end of 2014. The record also reflects that the Commonwealth was

particularly motivated to seek the Consent Decrees to alleviate the justifiable concerns it

had over the deleterious impact these looming terminations would have on certain

groups of vulnerable individuals most likely to be in need of access to UPMC facilities or

medical treatment, but who, because of their circumstances, would have the greatest

difficulty in paying higher out-of-network costs, or obtaining other insurance for such

care.    This included all those individuals enrolled, or eligible to be enrolled, in



                                     [J-77-2015] - 38
Highmark’s then extant Medicare Advantage plans. See Commonwealth Petition for

Review, 6/27/14, at 13; Commonwealth Brief at 28.

       The parties had previously entered into the Mediated Agreement, due to

intervention by state officials, to, inter alia, ensure some measure of continued access

for enrollees in Medicare Advantage plans to certain UPMC facilities for a limited period

of time upon termination of the provider agreements at the end of 2014. The Mediated

Agreement required the parties to negotiate in-network rates for this continued access.

See Mediated Agreement, supra.             However, once it became evident to the

Commonwealth that the parties would not, on their own initiative, reach a negotiated

agreement to accomplish this objective, the record amply supports the conclusion that

the Commonwealth, at that point, actively sought an alternative, more viable solution —

namely, a comprehensive and judicially enforceable accord which was binding on the

parties.   In order to ensure that those covered or eligible to be covered by these

Medicare Advantage programs, and all other individuals considered vulnerable

populations, would have long-term access to UPMC facilities beyond the time periods

established by the parties in the provider agreements then in place, the Commonwealth

specifically requested that the Commonwealth Court order the parties into a new

agreement, and also to provide a mechanism — last best offer arbitration — whereby

the rates for such access would be determined if the parties, as anticipated, could not

negotiate such rates. Commonwealth Petition for Review, 6/27/14, at 13 (requesting

that the Commonwealth Court “[r]equire that respondents reach an agreement for

hospital, physician and follow-up services for Highmark members who are part of

vulnerable populations, including, but not limited to consumers age 65 and older who

are eligible or covered by . . . Medicare Advantage . . . health plans . . . and, failing such

an agreement, impose last best offer arbitration”); Commonwealth Petition to Enforce




                                      [J-77-2015] - 39
Consent Decree, 4/27/15, at 7 (“The Consent Decrees, vigorously negotiated and

voluntarily executed by [the parties], were designed both in express terms and in

concept to protect vulnerable members of the public by providing senior citizens and

other care recipients with Highmark insurance to avoid suffering disruptions in their

medical   care   and/or   having    unavoidable    emergency      contacts   with   UPMC”).

Consequently, all of the provisions of the Consent Decrees, which, by their terms, were

intended to be a settlement of the matters raised by the Commonwealth in its Petition

for Review, see Consent Decree at IV(C)(5), to which both parties voluntarily agreed,

must be interpreted to effectuate this overarching objective of shielding vulnerable

populations from incurring excessive out-of-pocket medical costs, by ensuring their

access to UPMC facilities on an in-network basis, even after specific provider contracts

covering these populations were terminated, and that the scope of this protection was

specifically intended to extend to those individuals participating in Medicare Advantage

plans, and intended to last at least as long as the life of the decree.

       The vulnerable populations clause is the only clause in the Consent Decrees

affording vulnerable populations this cost containment protection, by setting forth the

specific contractual obligations of the parties with respect to their medical treatment.

The first sentence specifies that “vulnerable populations include: (i) consumers age 65

or older who are eligible or covered by Medicare, Medicare Advantage . . . .” Consent

Decree IV(A)(2). Thus, this introductory sentence furthers the central purpose of the

Consent Decrees, by establishing that all those covered, or eligible to be covered, by

Medicare Advantage plans are to be afforded all of the protections conferred by the

vulnerable populations clause. The remaining sentences in this clause must, therefore,

be read together with this introductory sentence, and, also, in a manner which is

consistent with the central purpose of the Consent Decrees. Pritchard; Murphy.




                                      [J-77-2015] - 40
      Turning to the second sentence of the vulnerable provisions clause, Medicare

Advantage is not enumerated within its list of other plans which provide medical

insurance to vulnerable populations such as CHIP and Highmark Signature 65.

However, this fact alone does not exclude those individuals participating in Medicare

Advantage from the protections of the vulnerable populations clause.19 Indeed, there is

no element of the second sentence which restricts the coverage of this clause to only

those individuals participating in plans enumerated in the second sentence; thus, by its

terms, the second sentence does not preclude protection for Medicare Advantage

participants from being addressed elsewhere in the clause. This is, in fact, entirely

consistent with the separate manner in which the parties previously treated these

various plans in the Mediated Agreement. In that agreement, one provision addressed

Medicare Advantage, whereas another addressed separate plans covering vulnerable

populations, such as CHIP. See Mediated Agreement, supra.

      Therefore, as the parties presently acknowledge, since Medicare Advantage

plans are not covered by the second sentence of the vulnerable populations clause, the

central question is whether the terms “Medicare participating consumers” in the third

sentence may be interpreted to afford protection to individuals in those plans. As Judge

Pellegrini recognized, the phrase “Medicare participating consumers” is not defined

19  As indicated supra, Highmark President Rice-Johnson testified that the purpose of
removing Medicare Advantage from the second sentence of the vulnerable populations
clause was to ensure that when Highmark offered its then new Community Blue
Medicare Advantage program it would not be accused by UPMC of being in violation of
the decree. N.T. Hearing, 5/27/15, at 210-11. However, she indicated that she did not
consider that deletion to relieve UPMC of its obligation to contract with Highmark for
those in its existing Medicare Advantage programs, which she viewed the third
sentence of the clause to require. Id. at 214-15. This uncontroverted evidence of
record buttresses our conclusion that Highmark did not intend, through this deletion, to
exclude those in its existing Medicare Advantage programs from the coverage of the
vulnerable populations clause.



                                    [J-77-2015] - 41
anywhere in the Consent Decree, nor does the introductory portion of this sentence use

the terms “Medicare” or “Medicare Advantage,” standing alone, as was done in the first

sentence. This reasonably suggests, then, that this phrase may not be restricted to

apply to either of those two programs individually.

      Accordingly, Judge Pellegrini properly resorted to the consideration of extrinsic

evidence on this question, which was furnished through the testimony taken at the

hearing held in this matter, and the exhibits submitted by the Commonwealth from the

federal government’s Medicare website.       Based on this evidence, Judge Pellegrini

found that the terms “Medicare participating consumers” were intended to broadly

include participants in both the Medicare and Medicare Advantage programs referred to

in the first sentence of the vulnerable populations clause.       Commonwealth Court

Opinion, 6/29/15, at 28. As this construction is reasonably supported by the evidence,

which we discuss below, we are bound by it.

      The overall statutory structure of the Medicare program has been succinctly

described by the Third Circuit Court of Appeals, thusly:

             The Medicare Statute divides benefits into four parts. Part A,
             “Hospital Insurance Benefits for Aged and Disabled,” and
             Part B, “Supplementary Medical Benefits for Aged and
             Disabled,” create, describe, and regulate traditional fee-for-
             service, government-administered Medicare. §§ 1395c to
             1395i–5; §§ 1395–j to 1395w–5. Part C, inserted with the
             passage of the Balanced Budget Act of 1997, Pub. L. 105–
             33, creates the program now known as Medicare Advantage,
             which allows for the creation of MA plans . . . Finally, Part D
             provides for prescription drug coverage for Medicare
             enrollees. § 1395w–101 to –154.
In re Avandia Mktg., Sales Practices & Products Liab. Litig., 685 F.3d 353, 357 (3d Cir.

2012). This explication supports the legal conclusion, advanced by the Commonwealth,

that Medicare Parts A, B, and C are statutorily treated as component parts of the overall

Medicare program, but serve the same common purpose of providing health insurance


                                     [J-77-2015] - 42
coverage to aged and disabled individuals.20 Most saliently, however, is the fact that

this interpretation of the function of Parts A, B and C, was further confirmed by the

previously described testimony of Sampson, a Pennsylvania Department of Aging

official with particular familiarity with the Medicare program due to her personal

experience in administering the Apprise program servicing elderly populations, and who

conducts educational training on issues relating to elderly health care. Critically, both

Sampson’s testimony, as well as the official materials from the federal agency which

administers the Medicare program, CMS, establish that, in the view of the federal

government, if an individual is enrolled in Medicare Advantage program, that individual

is still considered to be in the federal Medicare program. As such, a person who is

enrolled in Medicare Advantage receives their Medicare Part A and B benefits through

the   Medicare   Advantage    program.      See   N.T.   Hearing,   5/27/15,   at 41-66;

Commonwealth’s Exhibit 2, “13 things to know about Medicare Advantage Plans,”

https://www.medicare.gov/sign-up-change-plans/medicare-health-plans/medicare-

advantage-plans/things-to-know-medicare-advantage-plans.html (“1. You’re still in the

Medicare Program. 2. You still have Medicare rights and protections. 3. You still get

complete Part A and Part B coverage through the plan.”). Consequently, we conclude

that the Commonwealth Court’s findings that enrollees in Highmark’s Medicare

Advantage plans are properly considered participants in the Medicare program, and are,


20 Contrary to UPMC’s suggestion, a Medigap policy is fundamentally different from
Medicare Parts A, B and C, as it is designed to pay the difference in costs between the
amounts paid under Parts A and B of Medicare for medical care; hence, it is
unremarkable that Medigap is provided for separately under the second sentence of the
vulnerable populations clause. See “What’s Medicare Supplement Insurance
(Medigap)?,”    https://www.medicare.gov/supplement-other-insurance/medigap/whats-
medigap.html (“A Medigap policy is different from a Medicare Advantage Plan. Those
plans are ways to get Medicare benefits, while a Medigap policy only supplements
your Original Medicare benefits.” (emphasis added)).



                                    [J-77-2015] - 43
therefore, included within the ambit of “Medicare participating consumers,” in the third

sentence of the vulnerable populations clause, are amply supported by the record.

      We reject UPMC’s contention that “Medicare participating consumers” can only

be understood to refer to those individuals in Medicare Part A and B because the latter

part of the third sentence of the vulnerable populations clause states, “regardless of

whether [Medicare participating consumers] have Medicare as their primary or

secondary insurance.” Consent Decree, § IV(A)(2). As noted by Judge Pellegrini, the

third sentence of the Consent Decree explicitly obliges UPMC to treat all “Medicare

participating consumers” as “In-Network.”       Id.     The Consent Decree defines “In-

Network,” in relevant part, to mean “where a Health Care Provider has contracted with a

Health Plan to provide specified services for reimbursement at a negotiated rate to

treat the Health Plan’s members.”      Consent Decree, II(I) (emphasis supplied).       As

Highmark President Rice-Johnson’s testimony at the hearing established, which was

not otherwise disputed, there is no negotiation between the federal government and a

health care provider who agrees with the federal government to become a participating

provider in Part A and B of the Medicare program.           The provider must accept the

participating provider rates paid by CMS. Thus, as Judge Pellegrini found, if the phrase

“Medicare participating consumers” is restricted to only those participants in Medicare

Parts A and B, the Consent Decree would purport to allow negotiation of those rates,

even though such rates are determined by CMS and not subject to negotiation under

federal law.   Such an interpretation would, therefore, be illegal as Judge Pellegrini

determined. Since we do not countenance the interpretation of a contract which would

render it illegal or incapable of performance, but, rather, construe a contract to give

legal effect to every provision therein, we likewise refuse to interpret the third sentence

in this manner.    Murphy; see also Restatement of Contracts (2d) § 203(a) (“an




                                     [J-77-2015] - 44
interpretation which gives a reasonable, lawful, and effective meaning to all [contractual]

terms is preferred to an interpretation which leaves a part unreasonable, unlawful, or of

no effect.”).21

       While it is true, as UPMC argues, that, as a general rule of interpretation, a term

in a contract which is first used in a particular manner in the contract is usually given the

same meaning throughout the remainder of the contract, this maxim is not absolute, and

it must yield in the face of countervailing indications. Maloney; 11 Williston on Contracts

§ 32:6 (4th ed.).    Here there are strong countervailing reasons not to restrictively

interpret the term “Medicare,” as used in the third sentence, to apply only to Medicare

Part A and B, since that would annul the first sentence of the vulnerable populations

clause which expressly designates those individuals covered by Medicare Advantage as

a separate vulnerable population from those covered by Medicare Part A and B.

Moreover, and most importantly, such an interpretation would have the effect of

contravening the purpose of the Consent Decrees by entirely excluding those seniors

participating in Medicare Advantage plans from the “in-network” cost containment




21 As Judge Pellegrini found, this construction is consistent with his October 29, 2014
decision which dealt with the separate question of Highmark’s duty to under the
vulnerable population’s clause, i.e., whether Highmark was obligated to include UPMC
as an in-network provider under the vulnerable population clause for its then-newly
offered Community Blue HMO plan. As indicated above, Judge Pellegrini concluded in
his October 29, 2014 opinion that the language of the third sentence — i.e., “UPMC
shall treat all Medicare participating consumers as In-Network,” imposes a duty on
UPMC to treat those consumers as “In-Network,” but this same language, which also
appears in the vulnerable populations clause of Highmark’s Consent Decree, does not
impose a corresponding obligation on Highmark.




                                      [J-77-2015] - 45
protections established by the Consent Decrees, even though the record compels the

conclusion that these individuals were specifically intended to be protected.22

       Instead, we construe the operation of the second and third sentences of the

vulnerable populations clause as functioning in a manner that is consistent with the core

purpose of the Consent Decree — namely, that they work in tandem to provide

contractual protection to all vulnerable populations described in the first sentence of the

clause.   The second sentence requires that “UPMC shall continue to contract with


22  Although UPMC insists that the third sentence of the vulnerable populations clause
must be read only as a coordination of benefits clause that functions when a member of
a vulnerable population has Medicare Part A and B coverage, and also has commercial,
employer provided group health insurance, we are unpersuaded by this suggested
restrictive construction, given that, again, this would necessitate us to interpret the first
part of the third sentence of the vulnerable populations clause as requiring those
Medicare Part A and B consumers to be “In-Network,” and, thus, mandating the illegal
and impossible negotiation of rates for Medicare Part A and B coverage. Additionally,
inasmuch as some of the commercial provider contracts between Highmark and UPMC
were not covered by those decrees and, ultimately, expired at the end of 2014, see
Motion to Enforce Consent Decree, 4/27/15, at 3, it would be illogical under such
circumstances to construe this provision as being solely intended to govern the
coordination of Medicare Part A and B benefits with benefits which would no longer be
payable upon expiration of those commercial contracts. Likewise, as the Consent
Decree is only intended to establish the contractual obligations of Highmark and UPMC
for its duration, it would be incongruous to construe the sole purpose of this sentence to
be a coordination of benefits clause between Medicare Part A and B benefits and
benefits payable under commercial health insurance policies offered by insurers who
are not parties to the decree.
       Moreover, and most importantly, we note that interpreting “Medicare participating
consumers” as including those enrolled in Medicare Advantage plans, or eligible to be
enrolled, would not prevent this clause from operating to coordinate benefits for those
who also have employer based commercially purchased health coverage. Medicare
Advantage can function as either primary or secondary coverage in such
circumstances, see 42 U.S.C. § 1395w-22(a)(4) (setting forth authority of Medicare
Advantage organizations to act as secondary payers); 42 C.F.R. § 422.108,
(enumerating Medicare Advantage secondary payer procedures), and the clause would,
then, operate to require the rates paid by the Medicare Advantage plan for its members,
as either the primary or secondary payer, to be “In-Network,” and, therefore, established
by either negotiation or arbitration under the provisions of the consent decree.



                                      [J-77-2015] - 46
Highmark at in-network rates for all of its hospital, physician and appropriate continuity

of care services for CHIP, Highmark Signature 65, Medigap and commercial retiree

carve out as long as Highmark does not make unilateral material changes to these

programs.” Consent Decree, § IV(A)(2). The third sentence, while not using the same

“continue to contract” terminology, nevertheless obliges UPMC to treat those

participants in Highmark Medicare Advantage programs as “In-Network,” and, thus,

requires it have a contract with Highmark that establishes negotiated rates for treatment

of those in Medicare Advantage programs for which Highmark currently has provider

contracts with UPMC, or, if negotiations are fruitless, then such rates will be set by

arbitration under Section IV(C)(1)(a)(iii) of the Consent Decree.

       Accordingly, as the vulnerable populations clause specifically governs the

parties’ continuing obligations under the Consent Decree with respect to Medicare

Advantage participants for the time period that it covers — i.e., from the time of the

entry of the decrees until 2019 — this provision is not, as UPMC contends, superseded

by the provision in the introductory paragraph of the decree which provides that the

decrees are not “a contract extension.” Consent Decree I(A). Given the circumstances

surrounding the entry of the decrees, and construing this prefatory language in

conjunction with the vulnerable populations clause, the introductory admonition that this

is not a contract extension must be understood as only pertaining to the contracts

between the parties which existed prior to the effective date of the Consent Decree —

i.e., the Medicare Advantage provider agreements in effect at the time of the entry of the

Consent Decree which are now due to be terminated on December 31, 2015 — and it

forecloses the automatic annual renewal of those contracts.         However, it does not

relieve UPMC of the duty to perform its separate obligations imposed by the vulnerable

populations clause, which independently require it to treat as in-network all those




                                     [J-77-2015] - 47
participating in Highmark’s Medicare Advantage plans, which are subject to the existing

and soon to be terminated provider agreements. Certainly, in order to comply with the

requirements of the vulnerable population clause, UPMC could agree to continue these

existing provider agreements under their terms after their expiration on December 31,

2015, since they already furnish participants in Highmark’s Medicare Advantage plans

with in-network access to UPMC facilities; however, it has elected not to take this route.

       Thus, despite UPMC’s termination of the existing Medicare Advantage provider

agreements as of December 31, 2015, the vulnerable populations clause still obligates

UPMC to treat participants in Medicare Advantage plans governed by those provider

agreements as “In-Network” for the period January 1, 2016 forward, and the rates for

such treatment will be determined as specified by Section IV(C)(1)(a)(iii) of the Consent

Decree. Absent such agreement between the parties on rates, the Consent Decree

provides for binding arbitration to settle the matter. Id.      Consequently, as Judge

Pellegrini’s order, directing UPMC to be “in a contract,” and for UPMC to be an “in-

network” provider for Highmark Medicare Advantage plans because of UPMC’s

termination of the Medicare Advantage provider agreements, confirms these

obligations, we affirm it in this regard.23

                                        III. Issue Two

       UPMC next argues that, regardless of its obligations under the vulnerable

populations clause, it was, nevertheless, entitled to escape from the obligations


23  Because UPMC’s termination of the existing Medicare Advantage provider contracts
does not relieve UPMC of its separate contractual obligations created by the vulnerable
populations clause, the issue of whether Highmark made “admissions” that UPMC had
the right to terminate its existing Medicare Advantage provider contracts at any time is
irrelevant.




                                       [J-77-2015] - 48
imposed by the vulnerable populations’ under the fourth sentence of that provision,

because Highmark, after the execution of the Consent Decree, took certain positions in

which it claimed the unilateral right to adjust its fee schedules under the Medicare

Advantage agreements. Specifically, UPMC claims that Highmark took this position: in

the complaint regarding the rates it paid UPMC for oncology drugs it filed in the

Allegheny County lawsuit; in a pleading filed on July 9, 2015 in the AHLA arbitration

proceedings; in a letter Highmark sent to UPMC on March 13, 2015, in response to

UPMC’s notice to Highmark of its material breach; and in an interview in a Medicare

Advantage journal. UPMC claims that this “take the position clause” encompasses all of

these statements since, in its view, that clause has no temporal restriction and “applies

equally to past, present, and future contracts.” UPMC Brief at 58.

      Highmark denies that it took any position under the fourth sentence of the

vulnerable populations clause which would trigger UPMC’s right to escape its

obligations under the Consent Decree. Highmark avers that, to the contrary, since the

time of the entry of the Consent Decree, it has consistently taken the position, as

reflected in the aforementioned trial testimony of Rice-Johnson, that it considers itself

bound by the rate terms of the Consent Decree, and that, from the time of the entry of

the decree forward, it repeatedly averred that it would not change any rates unless it

was agreed upon by both parties or arbitrated. Highmark argues that the record reflects

it has adhered to this understanding of the scope of the Consent Decree and contends

that any actions it took regarding the disputed fees for the oncology drugs, and any

public statements related to its right to reimbursement, were regarding the pre-Consent

Decree provider agreements between it and UPMC — i.e., the Medicare Advantage

provider agreements which renewed before the entry of the Consent Decree on April 1,

2014, and which UPMC is terminating as of December 31, 2015. Highmark argues that




                                    [J-77-2015] - 49
the Consent Decree cannot reasonably be read as curtailing its rights to take positions

on matters which occurred prior to its entry.

       The Commonwealth agrees with Highmark’s interpretation that this “escape

clause” is forward looking in nature, and applies only to actions which Highmark took

after the entry of the decree.        The Commonwealth defends Judge Pellegrini’s

interpretation of this sentence as not prohibiting Highmark from challenging the pre-

Consent Decree action it took to change the oncology fee schedule prior to the April 1,

2014 renewal deadline. The Commonwealth proffers that it would be absurd to allow

UPMC to escape the Consent Decree by citing actions Highmark took before its entry,

as such an interpretation would allow UPMC to unilaterally exit the Consent Decree at

any time, rendering it an illusory and unenforceable agreement.

       The relevant sentences of the vulnerable populations clause pertaining to this

issue, sentences 3 and 4, provide:

              UPMC shall treat all Medicare participating consumers as In-
              Network regardless of whether they have Medicare as their
              primary or secondary insurance. UPMC reserves the right to
              withdraw from these arrangements if Highmark should take
              the position that it has the authority to revise the rates and
              fees payable under those arrangements unilaterally and
              materially.

Consent Decree § IV(A)(2).        As we have discussed, the third sentence of the

vulnerable populations clause, set forth above — that “UPMC shall treat all Medicare

participating consumers as In-Network” — requires that UPMC and Highmark maintain

a contractual relationship which sets “In-Network” reimbursement rates for medical

treatment provided to participants in Highmark’s Medicare Advantage plans.

Consequently, we read the phrase “these arrangements” appearing in the very next

sentence as referring to this contractual relationship.



                                     [J-77-2015] - 50
      Correspondingly, then, we must construe the phrase “if Highmark should take the

position that it has the authority to revise the rates and fees payable under those

arrangements unilaterally and materially” to refer to a situation where Highmark takes

the position that it has the right to unilaterally and materially change the rates and fees

payable to UPMC under the Medicare Advantage plans. We find this phrase to be

unambiguous. The phrase’s use of the words “if Highmark should take the position”

denotes a conditional future occurrence; thus, as Highmark and the Commonwealth

argue, this condition was intended to prospectively apply, from the time of the entry of

the decree forward. In other words, it is triggered if Highmark should take the position

that it has the right to unilaterally alter the rates and fees it pays to UPMC for patient

care under the Medicare Advantage agreements from the date of entry of the Consent

Decree through its termination.

      Highmark clearly believed that it had the right in April 2014, prior to the entry of

the Consent Decrees, to unilaterally change the oncology fee schedules it was paying

under the Medicare Advantage provider agreements in effect at that time, and which

renewed for 2015. This belief is reflected in the various documents referred to by

UPMC in its brief, which all contain assertions by Highmark and its management

personnel that it was justified in making that alteration to the fee schedules in 2014

under the terms of those agreements.              However, the record supports the

Commonwealth Court’s conclusion that Highmark did not consider itself to possess the

right to take such unilateral action once the Consent Decrees were entered. To the

contrary, the record reflects the Commonwealth Court’s conclusion that Highmark

consistently disavowed that it had any such right under the Consent Decree to make




                                     [J-77-2015] - 51
such changes, and it considered the decree’s specified mechanisms for setting rates for

its Highmark Advantage plans, i.e., negotiations and arbitration, to be controlling.

        Highmark’s stance on this subject is best reflected by Rice-Johnson’s testimony

at the hearing in the Commonwealth Court: “Once we entered into the arrangement

with the Consent Decrees, that limited our ability to [change fee schedules]. So during

the period of the Consent Decree forward, we will not change rates unless they are

mutually agreed upon or agreed upon through arbitration.” N.T. Hearing, 5/27/15, at

186.    Judge Pellegrini credited this testimony in finding the express terms of the

Consent Decrees specifically account for, and explicitly recognize Highmark’s right to

seek,     resolution   of   the   pre-Consent   Decree   dispute   over    oncology    drug

reimbursements. See Consent Decree, § IV(C)(1)(a)(i)(ii) (referring to “rates currently

being arbitrated” by UPMC and Highmark).                 Consequently,    we affirm the

Commonwealth Court’s conclusion that UPMC may not seek release from the Consent

Decree based upon conduct by Highmark that specifically was permitted by the Consent

Decree.

                                      IV. Issue Three

        Finally, UPMC attacks, as an alleged denial of due process, paragraph 3 of

Judge Pellegrini’s order, which bars both UPMC and Highmark from making “any

changes to any Plan, contract, or other business relationship between UPMC and

Highmark . . . no matter how small, without first securing approval from the Court,” and

paragraph 4 of his order, which states “[t]he Commonwealth will file a request for

supplemental relief to effectuate compliance with the consent decrees, including but not

limited to, changes in corporate governance.” Order, 5/29/15, at 3. UPMC claims that it

was given no notice that such relief could be entered during the proceedings below, as


                                      [J-77-2015] - 52
it was not requested by the Commonwealth in its motion to enforce the decrees.

Further, UPMC argues that the Commonwealth Court had no jurisdiction to supervise

the private business interactions between these two parties, as its jurisdiction was

limited to resolving matters arising under the Consent Decree only; nor, it claims, did the

Commonwealth Court have original jurisdiction to hear issues relating to changes in

corporate governance, as such matters are within the original jurisdiction of the

Orphans’ Court Division of the Courts of Common Pleas.

       Highmark responds that UPMC mischaracterizes paragraph 3 of Judge

Pellegrini’s order, inasmuch as paragraph 3 encompasses only matters covered by the

Consent Decree, over which the Commonwealth Court, by the terms of that decree,

retains jurisdiction to resolve. The Commonwealth, for its part, suggests that UPMC’s

appeal should be quashed under our Court’s decision in Rae v. Funeral Directors

Association, 977 A.2d 1121 (Pa. 2009), in which our Court ruled that, in situations

where there is an order of a lower tribunal containing multiple parts, and one part of the

order meets the three-pronged test allowing for immediate appeal as a collateral order

under Pa.R.A.P. 313, the remaining parts of the order are not subject to appellate

review unless each of those parts independently meet the three-pronged test as well.

While the Commonwealth acknowledges that Judge Pellegrini’s order is not collateral,

but instead, views it as interlocutory since it contemplates further proceedings in the trial

court, the Commonwealth asserts that we should, nevertheless, apply the rationale of

Rae and quash the portion of UPMC’s appeal dealing with paragraphs 3 and 4 of Judge

Pellegrini’s order.




                                      [J-77-2015] - 53
       Our review of paragraph 3 of Judge Pellegrini’s order compels us to conclude

that it is prohibitory in nature, in that it bars both parties from taking any further action

which would alter their business relationships without obtaining approval from the

Commonwealth Court.           Thus, contrary to the Commonwealth’s suggestion, this

paragraph constitutes a form of injunction. See Levin v. Barish, 481 A.2d 1183, 1187

(Pa. 1984) (“An injunction is a court order prohibiting or commanding virtually any type

of action.”). As such, it is an interlocutory order immediately appealable as of right

under Pa.R.A.P. 311(4). See supra note 15. Thus, we will not quash UPMC’s appeal of

this part of the order.

       However, as Judge Pellegrini explained in his opinion, the scope of this order is

limited to precluding UPMC and Highmark from altering their business relationships or

contracts   “that   involve   matters    within   the   scope of   the consent     decrees.”

Commonwealth Court Opinion, 6/29/15, at 35. Consequently, we conclude that Judge

Pellegrini’s order, when viewed in this circumscribed fashion, is authorized by the

Consent Decree, inasmuch as the parties agreed therein that the Commonwealth would

“have exclusive jurisdiction to enforce the Consent Decree” before the Commonwealth

Court. Consent Decree, § IV(C)(4). Moreover, we note that this section also affords

ample due process protections by spelling out mandatory notice provisions which must

be provided to a party before any formal enforcement action may be taken against that

party in the Commonwealth Court, and it requires the party be afforded the opportunity

to cure any violation under the agreement prior to enforcement action being taken. Id.

In addition, if formal enforcement action is later taken in the Commonwealth Court, both

parties are given the opportunity, as they were here, to present evidence and have their




                                        [J-77-2015] - 54
respective positions considered. Id. We, thus, affirm this portion of Judge Pellegrini’s

order.

         Likewise, we consider the fourth paragraph of Judge Pellegrini’s order to be in

the nature of an injunction, since it is a mandatory directive to the Commonwealth that it

“will file a request for supplemental relief to effectuate compliance with the consent

decree.” Commonwealth Court Order, 5/29/15, at 3 (emphasis added). Accordingly,

because the order commands the Commonwealth to undertake a specific future action,

we consider this portion of Judge Pellegrini’s order to constitute an interlocutory order

appealable as of right under Pa.R.A.P. 311(4). Levin.

         Even so, we find that this issue is not yet ripe for our adjudication. Generally

speaking, as our Court has previously articulated, “the doctrine of ripeness concerns the

timing of a court’s intervention in litigation.” Philadelphia Entm't & Dev. Partners, L.P. v.

City of Philadelphia, 937 A.2d 385, 392 (Pa. 2007). This jurisprudential doctrine seeks

to avoid having our court prematurely adjudicate a controversy, and thereby become

entangled in resolving an abstract or hypothetical issue, whenever no party has, yet,

suffered a concrete harm which could be alleviated through appellate review. Id. When

determining whether a matter is ripe for judicial review, our Court will “generally

consider whether the issues are adequately developed and the hardships that the

parties will suffer if review is delayed.” Bayada Nurses, Inc. v. Com., Dep't of Labor &

Indus., 8 A.3d 866, 874 (Pa. 2010). Presently, the Commonwealth has not taken any

enforcement action under this paragraph of Judge Pellegrini’s order, nor, as it indicated

in its brief, is it contemplating any at this time. Hence, were we to opine regarding

whether the potential exercise of this power by the Commonwealth is lawful, we would




                                      [J-77-2015] - 55
be rendering an advisory opinion. Inasmuch as neither party is, at present, suffering

harm from this provision of Judge Pellegrini’s order, we conclude that UPMC’s

challenge to it is not ripe for review at present. We, therefore, quash this portion of

UPMC’s appeal. See Brown v. Commonwealth Dept. of Health, 434 A.2d 1179, 1181

(Pa. 1981) (quashing appeal raising claims which were “premature”).

      Order affirmed in part, quashed in part. Jurisdiction relinquished.

      Mr. Chief Justice Saylor and Mr. Justice Eakin join the opinion.

      Mr. Chief Justice Saylor files a concurring opinion.

      Mr. Justice Baer files a concurring and dissenting opinion in which Mr. Justice

Stevens joins.




                                    [J-77-2015] - 56
