UPMC Files Suit Against Pittsburgh Taxpayers

UPMC Files Suit Against Pittsburgh Taxpayers

Paul Wood, UPMC’s spokesman told the Post-Gazette, “…UPMC looks forward to demonstrating in a court of law that we meet all five prongs of the HUP test and that our hospitals easily qualify for the tax-exempt status they unquestionably deserve.”
But now it seems UPMC management isn’t so confident. Perhaps they took a look at the HUP test, the standard Pennsylvania law requires charities to meet, and had second thoughts. Donating a substantial portion of its services? With only 2% of UPMC’s revenues going to charity care that might be a bit of a stretch. Operating entirely free of the private profit motive? It might be kind of hard for UPMC executives to demonstrate that claim while cashing their multi-million dollar paychecks and flying around UPMC’s global empire in private jets.
So instead of showing tax-payers That UPMC’s a charity, the healthcare giant is , suing taxpayers for an undisclosed sum of money, claiming that their civil rights have been violated.
That’s pretty rich, coming from an employer whose violation of its employees rights resulted in an historic settlement that required UPMC to stop harassing, intimidating and discriminating against workers.  Now the $10 billion dollar global health bully wants us to pay it back for the damage we’ve caused by telling the truth about UPMC’s operations.
As E.J. Strassburger, the Pittsburgh attorney representing the City in it’s challenge of UPMC’s charity status, told the Pittsburgh Tribune-Review:
““It is unclear to me how asking a court to make a determination whether UPMC is or is not an institution of purely public charity is a violation of its constitutional rights… The painfully obvious bottom line is that the last thing UPMC wants is judicial scrutiny of its non-charitable agenda.”
Join us in holding UPMC accountable to our city – sign onto our code of conduct and demand that UPMC start acting like a true charity – and stop acting like a big bully.
Together We Can Make It Our UPMC

Overwhelming Majority Supports City’s Challenge of UPMC’s Tax Exemptions

A recent poll conducted by the Tribune-Review showed that 76% of registered democrats support the city’s challenge to UPMC’s tax exempt status.

A recent poll conducted by the Tribune-Review showed that 76% of registered democrats support the city’s challenge to UPMC’s tax exempt status.

A recent poll conducted by the Tribune-Review showed that 76% of registered democrats support the city’s challenge to UPMC’s tax exempt status.

“The poll conducted by Susquehanna Polling & Research of Harrisburg found that 76 percent of those voters support outgoing Mayor Luke Ravenstahl’s bid to strip the health care giant’s property and payroll tax exemptions.”

In his March 20th press conference announcing the tax challenge, Mayor Luke Ravenstahl estimated that if UPMC paid the 0.55-percent payroll tax and property taxes, it would contribute an additional $20 million a year to the city.
In 2011 UPMC’s federal, state and local tax breaks cost taxpayers $204 Million dollars. That is enough money to cover the deficits of the Port Authority, Pittsburgh Public Schools, and still have left UPMC with large profits. That is big money that should be used to better our communities, and is one more example of how UPMC is not a charity.
Read the full Tribune-Review article here.

Community Delegation Demands UPMC Bring Back Ron and End Campaign of Persecution Against Workers

Ron Oakes with a delegation of elected officials, community members, and other UPMC workers.

Ron Oakes with a delegation of elected officials, community members, and other UPMC workers.

Tuesday afternoon, a delegation of elected officials, community members, and UPMC workers went to UPMC Presbyterian President John Innocenti’s office demanding that he bring back fired union supporter Ron Oakes. This is the second time UPMC has fired Ron as part of its campaign of intimidation of workers who are standing up for better jobs and a voice at work.
The delegation was not allowed to meet with Mr. Innocenti, but only allowed to briefly speak with his assistant.

See photos of the delegation in action on Facebook

In the days since our city challenged UPMC’s status as a charity, UPMC has stepped up its campaign against workers attempting to improve their jobs. In response, workers are filing over 20 new charges against UPMC.
The new Unfair Labor Practices allege that UPMC is engaging in a systematic pattern of interfering with, restraining and coercing employees who are forming their union.  Specifically, since the historic settlement with the National Labor Relations Board, where UPMC committed to uphold the law, UPMC managers and supervisors have threatened employees with disciplinary action (including termination), have surveilled employees who are known union supporters, interrogated and harassed other union supporters, have warned employees that they are prohibited from speaking about the union, and has altered duties and responsibilities all in an insidious and unlawful effort to prevent employees from forming their union.  UPMC has also summoned police and threatened to arrest employees who were simply talking about the union on non-work time.  Federal law protects employees’ right to speak about the union.
UPMC’s anti-union actions reflect a clear pattern of targeting workers who have been vocal and public in their support for forming a workers’ organization. In addition to violating federal law, many of UPMC’s actions also violate the settlement that UPMC agreed to with the Board on February of 7, 2013, to avoid going to a public trial over 80 alleged violations of federal labor law.
At a time when many in the city are questioning UPMC’s behavior, the Hospital system’s repeated use of scarce healthcare funds to retaliate against workers standing up for fairness on the job is the latest proof that UPMC isn’t a real charity.
Despite UPMC’s outrageous behavior, workers are refusing to back down. But they need your help.
Show Ron and the rest of the UPMC workers that you have their back by donating to the UPMC Workers’ Hardship Fund today.

UPMC Fires Union Activist Ron Oakes For Second Time

Union Activist Ron Oakes

Union Activist Ron Oakes

Just weeks after workers won a historic settlement against UPMC and forced the hospital to reinstate fired workers and union activists Frank Lavelle and Ron Oakes, UPMC is at it again.
On the same day Pittsburgh’s Mayor announced the City would be challenging UPMC’s charity status, UPMC fired Ron Oakes AGAIN.  Ron is widely known as someone who goes above and beyond for his patients and is quick to lend a hand to his coworkers.
Support Ron and the rest of the UPMC workers in their courageous struggle by signing the petition to demand that UPMC bring Ron back to work immediately.
UPMC has also stepped up its harassment, surveillance, and in some cases, suspension of workers for their union support. UPMC even called the police on workers who were talking about the union on their lunch break.
Despite UPMC’s outrageous behavior, workers are refusing to back down. But they need your help.
Sign the petition and tell UPMC to reinstate Ron today!

FAQ – City Challenges UPMC Tax Exempt Status

Support for our city’s challenge to UPMC’s status as a charity has been overwhelming. Many people would like to know more about what the challenge means and what we can expect:
Doesn’t the federal government get to decide what a charity is?
The IRS definitely sets out standards that institutions must meet to qualify as a charity at the federal level (a status that would make it exempt from federal income tax).  However Pennsylvania gets to set separate standards for “institutions of purely public charity” that apply at the state and local level.  . These state standards determine whether organizations like UPMC qualify for exemption from local property and payroll tax, state income tax, and other taxes that are levied inside the Commonwealth.
Where does Pennsylvania define “institutions of purely public charity?
In our state, the standard for being designated an institution of purely public charity is laid out in a 1985 Pennsylvania Supreme Court Case (Hospital Utilization Project v. Commonwealth, or “HUP” for short), in which the justices ruled that a non-profit must meet five criteria to qualify as an institution of purely public charity.  This 5-factor test is known as the “HUP Test”.
Since 1985, Pennsylvania courts have decided dozens of cases that further define each factor of the HUP Test.  In 1996, however, the state legislature passed a law (Act 55) that defined each HUP factor in ways that are easier to satisfy than the definitions articulated by the courts.  As a result, Act 55 effectively lowered the standard for qualifying as an institution of purely public charity.
Some not-for-profits claim tax exemptions based on that easier standard. But last year, a new Supreme Court case (Mesivtah Eitz Chaim of Bobov v. Pike County Board of Assessment Appeals) reasserted that organizations must satisfy the courts’ interpretation of the HUP test—and not the Act 55 version—to be deemed a charity and qualify for state and local tax exemptions.
What are the five criteria laid out by the “HUP” test?
Every non-profit in the state must meet all five criteria in order to be considered a purely public charity.
1. It must advance a charitable purpose
2. It must donate or render gratuitously a substantial portion of its services
3. It must benefit a substantial and indefinite class of persons who are legitimate subjects of charity.
4. It must relieve the government of some of its burden; and
5. It must operate entirely free from a private profit motive.
Why doesn’t UPMC pass the “HUP” test?
In order to be considered a purely public charity, UPMC must pass all 5 of the requirements of the HUP test. However, certain aspects of UPMC’s operations suggest that, at a minimum, they fail to satisfy the second factor (which requires UPMC to provide a “substantial” share of its services “gratuitously,” i.e., free-of-charge), and the fifth factor (which requires UPMC to operate entirely free from profit motive).  These facts include:

  • UPMC devotes less than 2% of its net patient revenue to charity care, a level that is not substantially more than Pennsylvania’s for-profit health systems.
  • UPMC has downsized or closed facilities in lower-income communities while expanding or opening entirely new facilities in more affluent communities.
  • UPMC has recently stopped seeing patients who carry Highmark’s Community Blue insurance, even when patients are willing to pay cash. This has left many patients stranded and unable to continue the care they need with the doctors they know.

So what does this all mean?
UPMC’s tax-breaks cost taxpayers an estimated $204 million dollars in federal, state and local taxes income and property taxes in 2011. In addition, UPMC receives subsidies in the form of tax-exempt bonds, exemption from tax on the sale of intellectual property and other financial breaks that are not accorded businesses without charity status.  Our City is claiming that its largest private landowner, employer, and healthcare provider needs to act like a charitable institution—and satisfy the legal requirements for tax-exempt status, as set forth in the HUP Test—to be worthy of these benefits.

Pittsburgh Post-Gazette Endorses Mayor’s Challenge of UPMC’s Tax Exempt Status


Pittsburgh Post-Gazette Endorses Mayor’s Challenge of UPMC’s Tax Exempt Status

In an editorial on March 27th, the Post-Gazette officially endorsed our city’s decision to challenge the tax exempt status of UPMC, calling it “a fight worth having.”
Pennsylvania’s “HUP test” which sets the standard for charitable organizations has five distinct prongs, and organizations must pass all of them to be deemed a charity worthy of tax-exemptions. The Post-Gazette‘s argument for supporting the challenge to UPMC focuses in on the 5th of these prongs, which states that an “institution of purely public charity” must “operate entirely free of private profit motive.”

“UPMC closed Braddock hospital in a poverty-stricken area, saying it could not afford the red ink, at the same time it was building one in Monroeville, a prosperous community where another modern hospital already existed.
UPMC, which vigorously promotes its own health insurance plan, does not want to provide affordable access to Highmark insurance customers, who represent the majority of the Western Pennsylvania market.”

 These examples raise serious questions about UPMC’s business practices, and whether or not UPMC is in fact an organization that operates free of private profit motive.
Read the rest of the Post-Gazette article here.

News Roundup: Pittsburgh Challenges UPMC’s Charitable Tax Exemptions

Seems like everyone’s talking about the city’s decision to stand up to UPMC. It’s great to see so many people agreeing that if UPMC wants the benefits of being a charity, it needs to start acting like one.
Here‘s some of the best coverage:.
Mayor v. Moneybags: UPMC could be beloved if it put patients over profits and perks – Sally Kalson
“It’s based on the correct impression that a nonprofit hospital’s top priority should be the patients, not building a monopoly. And that a $10 billion system with a billion-dollar surplus and $2 billion to $3 billion in reserves should be taking care of many more indigent sick people than UPMC has been treating — especially when it owns land that a Post-Gazette investigation valued at $1.6 billion, even as it enjoys a $20-million tax break every year, underwritten by the good citizens of Pittsburgh and Allegheny County. “
Profit motive: The city’s UPMC suit will turn on one key factor – Post-Gazette
It is also known for its bitter public dispute with another health-care giant, Highmark, which wants to partner with the West Penn Allegheny Health System, a rival hospital network. UPMC does not want to renew its contract after 2014 with the region’s dominant insurance provider, meaning Highmark customers will lose in-network access to most UPMC services.
UPMC considers all that merely a consequence of competition. The community, by and large, sees it as a double-cross to the people and region whose donations, health premiums and tax dollars built UPMC.
 Ravenstahl pledges challenge to UPMC’s tax-exempt status – Moriah Balingit
The mayor cited UPMC’s closure of hospitals in low-income communities, like Braddock, in favor of building hospitals in more affluent communities and facilities abroad. He also talked about the company’s hard stand with rival Highmark insurance, some of whose customers have been denied care in UPMC’s facilities.
Ravenstahl: Pittsburgh sues to remove UPMC’s tax-exempt status – Jeremy Boren and Bobby Kerlik
Pittsburgh Mayor Luke Ravenstahl said city taxpayers should not subsidize the $10 billion hospital system that has fueled UPMC’s rise as Pennsylvania’s largest employer and the region’s richest nonprofit organization.

UPMC doesn’t exactly smell like a nonprofit – Eric Heyl

Ravenstahl referred to the self-described $10 billion global health enterprise’s funhouse mirror insistence that it is a public charity, a legitimate nonprofit entity. The mayor tossed a large rock toward that mirror by announcing the city is legally challenging UPMC’s tax-exempt status; shattering it could net the city $20 million annually.

City of Pittsburgh v. UPMC: Necessary lawsuits – Trib-Review

UPMC was quick to spin the City of Pittsburgh’s legal challenge of its tax-exempt status as a vendetta fueled by politicians doing the bidding of organized labor and business interests. It’s a smokescreen, of course. And rationalizations of such grand conspiracies can’t hide the fact the “nonprofit” claims of this $10 billion worldwide hospital behemoth are ripe for vetting in a court of law.

 UPMC, Pittsburgh stake positions for court fight on nonprofit status – Sean D. Hamill

Mr. Strassburger cites UPMC’s own documents and officials’ statements that show that UPMC may be providing charity care of anywhere from $204 million, or 3.6 percent of net patient revenues, to $87.2 million, or under 1 percent.
Community Blues – UPMC finally feels our pain – Chris Potter
But Ravenstahl’s press conference wasn’t a complete disaster. The media completely ignored UPMC’s most damning critic: Brookline resident Kendra Bowser.
While the politicians talked about CEO pay and the cost of UPMC’s tax exemptions, Bowser was more succinct: “I’m no longer permitted to see the doctors who have been able to give me the ability to live my life,” she told reporters.