In a new market for western Pennsylvania healthcare lives, Highmark and UPMC are finding old disputes lurking, adding to consumer confusion amid a new product launch and open enrollment.
This past summer, Highmark Blue Cross and the University of Pittsburgh Medical Center signed a consent decree that was supposed to end years of acrimony and lawsuits by offering a way forward for Highmark to design low-cost plans based on its Allegheny Health Network, while also preserving access to UPMC hospitals and physicians for certain Highmark members.
That consent decree is now being tested, as UPMC challenges a new Highmark Medicare Advantage plan that exclude UPMC and several other health systems, with the help of state regulators.
Highmark's Community Blue Medicare HMO is an extension of the same narrow network, low premium plan that last year spurred UPMC's interest in cutting ties completely. The Community Blue Medicare plan offers seniors the option of zero monthly premiums and medium-range cost-sharing or limited co-pays for $193 per month, for a network comprised of the seven hospital Allegheny Health Network, which Highmark acquired in 2013.
UPMC is threatening to file an emergency court action against Highmark, and the Pennsylvania insurance commissioner, healthcare secretary and attorney general are warning the insurer that the new Community Blue Medicare plan may indeed violate the consent decree, which was brokered by Pennsylvania Governor Tom Corbett.
UPMC in-network access must be preserved for vulnerable populations in Highmark plans, including Medicare, Medicaid, Medicare Advantage, Medigap and CHIP, although UPMC may withdraw from participation if Highmark tries to "revise the rates and fees payable under those arrangements unilaterally and materially," according to the consent decree.
Highmark argues that its new Community Blue plan doesn't violate the terms of the consent decree, since the agreement doesn't bar tiered networks and since it's continuing to sell Medicare Advantage plans with UPMC in-network. The company also noted that the plan was already approved by the Centers for Medicare & Medicaid Services, and has started enrolling some seniors who turned 65 ahead of the open enrollment starting October 15.
Anthony Benevento, Highmark senior vice president of Pennsylvania markets, pointed out that tiered plans are new to the Pennsylvania area.
"This kind of plan helps to control costs while providing members access, which we know is important for our individual customers and group clients," Benevento said. "And because a tiered-benefit plan offers a lower price when care is delivered more cost effectively, tiering provides one more level of transparency to the customer. They will know the difference in cost when they choose one provider or facility over another."
It's not clear how many subscribers Highmark has in its Community Blue portfolio, which features a network of 8,082 physicians and 52 Hospitals in western and central Pennsylvania, but the insurer is looking to grow its membership in its first years owning Allegheny Health Network.
Premiums for a number of Highmark's popular health plans are increasing: from $82 to $137 for the Freedom Blue PPO Select plan, and from $194 to $280 for the Freedom Blue Classic.
UPMC Health Plan, meanwhile, is taking a similar strategy in building membership for a network of providers largely based on the mother health system.
UPMC Health Plan, for instance, is offering a $0 premium Medicare Advantage plan -- as part of the UPMC for Life Medicare portfolio -- and is also lowering monthly premiums for four different plans, including an HMO deductible and pharmacy plan with premiums dropped from $37 to $18 and a low cost-sharing HMO/Rx plan with premiums dropped from $84 to $78.
Whatever the fate of the Highmark and UPMC's respective tiered networks, if the consent decree lasts another ambiguity may loom over a vulnerable population.
Under the agreement, Highmark beneficiaries will have UPMC in-network as an option for all cancer services and all services regarding illnesses arising from a cancer diagnosis, if the treating physician determines that UPMC specialists or facilities are required. Disputes over decisions by treating physicians, including those at the Allegheny Health Network, will be decided by the Department of Health.
As Tucker Arensberg attorney Michael Cassidy wrote: "It remains to be seen how independent physicians and physicians within the Allegheny Health Network employed group will handle the situation."