Despite some lulls, the war between the University of Pittsburgh Medical Center and Highmark is again raging, now with a battle over Medicare Advantage plans and oncology reimbursement.
UPMC, western Pennsylvania's largest hospital and healthcare provider, is threatening to end its in-network contract for all of Highmark's Medicare Advantage members, unless the Blue Cross insurer and owner of a rival health system backtracks on a year-old policy that ended facility fee payments in oncology reimbursement.
"No responsible organization could enter into--let alone extend--such illusory and one-sided contracts," UPMC said in a statement outlining the decision. "Highmark has not been paying us. It's now up to $143 million," UPMC chief communications officer Paul Wood told the Pittsburgh Post-Gazette.
Last spring, Highmark stopped paying what it deemed to be "markups" at UPMC outpatient oncology facilities, including the Hillman Cancer Center, for services like infusion chemotherapy.
It was an attempt to "restore more rational payments," the insurer said, amid a national trend of hospital-owned clinics adding facility fees to bills for cancer and other services performed in non-hospital settings. For UPMC medical oncology services, the increases were as high as 200 percent, Highmark said, estimating that cutting the fees would save $200 million per year and thousands of dollars in out-of-pocket costs for members receiving cancer treatment.
At the time, Highmark and UPMC had not yet reached a state-brokered consent decree to preserve in-network access for certain Highmark members--including most seniors on Medicare Advantage--and allow the formation of various network-based products. Highmark had also not yet created a narrow network Medicare Advantage plan, a version of the Community Blue plans that, along with Highmark's takeover of the Allegheny Health Network, led to UPMC's pursuit of a breakup.
With the oncology dispute, UPMC said it gave Highmark a year to reverse the payment decision, which the health system argued was a breach of contract, and to drop a related lawsuit. Now, unless Highmark ends up changing course, UPMC said it's going to end network contracts covering Highmark's Medicare Advantage plans effective in January 2016.
According to UPMC, the consent decree agreed to last July "explicitly contemplated this possibility, giving UPMC the right to withdraw from its Medicare Advantage arrangements with Highmark."
"UPMC shall treat all Medicare-participating consumers as in-network," the consent decree reads. "Highmark acknowledges that 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."
Another factor in question is Highmark's new, zero-premium Community Blue Medicare Advantage plan that does not include UPMC providers. Currently covering around 7,000, the Community Blue MA plan was introduced last fall, while premiums were increased by 25 percent and more for Highmark's other MA plans covering some 180,000 seniors.
With UPMC's support, the Pennsylvania government sued Highmark, arguing that the consent decree's "vulnerable populations" provision mandated that all Medicare plans keep UPMC in-network. But a judge sided with the insurer's interpretation, that it could offer an MA plan without UPMC as long as it still sold other MA plans with UPMC.
Now Pennsylvania's new governor, Democrat Tom Wolf, and attorney general Kathleen Kane are expressing concern about UPMC's proposal. Wolf called UPMC's plan to end network access "unacceptable" and vowed to pursue "all options to reverse this decision, including court action."
"It is a clear violation of UPMC's commitment to protect senior citizens and vulnerable populations as enshrined in the consent decree," Wolf said in a media release. "Our most vulnerable citizens should never be used as leverage in contract negotiations or disputes."
Highmark lauded Wolf's stance on the issue, and argued that the proposed contract cancellation is unfair retaliation for the oncology reimbursement changes. "Because of Highmark's leadership in keeping cancer care affordable and saving area employers and self-insured individuals from paying grossly inflated prices for cancer drugs, UPMC is holding 180,000 seniors hostage," a spokesperson said in a statement.
UPMC, meanwhile, is beckoning seniors to its own health plan, UPMC for Life Medicare Advantage, and also noting other options, from Aetna, UnitedHealthcare and Cigna-Health Spring.
UPMC for Life currently covers around 123,000 seniors on Medicare Advantage, plus 18,000 in special needs plans. As Highmark increased MA rates for this year, and lost some of its membership, UPMC for Life reduced premiums for four of its six MA plans, and touted a range of benefit designs--an unlimited fitness network, a $5 copay for primary care visits, vision allowance, discounts for dental and hearing services, and a $0 premium HMO plan.