After more than a year of dispute over continuing a contract, insurer and new health system-owner Highmark and the University of Pittsburgh Medical Center have reached a comprehensive transition agreement.
"We listened to all parties and through a shared commitment to protecting patients and insurance consumers, designed the framework for a transition plan that focuses on putting them first," said Pennsylvania Gov. Tom Corbett in a press release. He and Attorney General Kathleen Kane brokered the deal.
Under two consent decrees outlining the roadmap, Highmark and UPMC have agreed to let their in-network contract expire at the end of this year without renewal (as UPMC has insisted it should), albeit with some of Highmark's 3.2 million western Pennsylvania members able to access UPMC physicians and facilities in-network conditionally.
Highmark members in the midst of UPMC treatment can continue on an in-network basis for as long as the patient and his or her doctor deem it necessary, the decree said. Those Highmark members being treated for cancer will have also have ongoing access to UPMC providers in-network with physician approval.
Emergency and trauma services are set to be accessible at in-network rates at all of UPMC hospitals and Highmark's Allegheny Health Network hospitals.
The consent decree states that Highmark members will have ongoing access to "unique UPMC local providers and services where the patient's treating physician believes the patient needs such services and they are not available from another source," and there will be a one-year safety net provision for any existing UPMC patient and Highmark subscriber unable to find alternative physicians and services in their area.
Highmark members covered through Medicare, Medicaid, CHIP and Medigap will continue to have access to UPMC providers and facilities.
For all Highmark customers across different commercial plans, half of UPMC's 16 hospitals will remain in-network under still-to-be negotiated terms, including the Children's Hospital, downtown Pittsburgh's Mercy Hospital, the Western Psychiatric Institute and hospitals in the Bedford, Venango and Altoona. But some of UPMC's most well-regarded hospitals will be left out, such as the 520-bed Presbyterian Shadyside, the region's largest inpatient acute care hospital, the recently renovated Magee-Women's, and UPMC East, the new 156-bed hospital with all private rooms that opened in 2012 in the suburb of Monroeville.
UPMC and Highmark described the arrangement as one that is in the interest of both patients and their respective business goals.
Bringing to close a "sometimes acrimonious dispute," UPMC leaders said in a media release, the agreement "provides patients, subscribers, employers and the community with the ability to definitively plan for the new and vibrant environment in which UPMC and Highmark – along with the national insurers – will compete on the basis of quality, cost and availability of medical services."
Highmark said the arrangement will "serve as a roadmap for how Highmark members will continue to access UPMC. It also provides the continued ability to develop such health insurance products and services as tiered networks and consumer-focused health plans, to meet the changing needs of customers."
Highmark is UPMC's second largest payer after Medicare, accounting for about 19 percent of its revenue, and since it formed the seven-hospital Allegheny Health Network through the acquisition of UPMC's largest competitor, the West Penn Allegheny Health System, it is also now the largest competitor for medical and hospital care.
Since 2012, Highmark's Community Blue select network plan has sparked a wave of consumer outcry and public relations battles between the two organizations, with stories of members, including University of Pittsburgh students, being turned away for non-emergent care. UPMC described the plan as unfair, reimbursing UPMC facilities at a lower level but barring any "balance billing" of members.
Under the consent decree, Highmark and UPMC each will contribute $2 million for the state to devote to public outreach and education of the new options, and "to cover the state agencies' costs in reaching these agreements," Corbett said.