Healthcare Business News
Pa. Gov. John Corbett announced terms of the contentious breakup of Pittsburgh insurance company Highmark and health system UPMC

UPMC, Highmark set terms for contract to expire in 2015

By Melanie Evans
Posted: June 27, 2014 - 3:30 pm ET

Pennsylvania's governor announced terms of the contentious breakup of Pittsburgh insurance company Highmark and UPMC, the city's dominant health system.

UPMC and Highmark, which acquired UPMC's struggling rival health system, have fought aggressively and publicly over the expiring contract for Highmark members to get in-network services at UPMC's facilities. Highmark has sought to extend the contract, and UPMC refused.

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Under a deal announced by Gov. Tom Corbett, Highmark members will get continued access to UPMC after the contract expires Jan. 1. Notably, the deal sets restrictions on “unclear or misleading” advertising and requires Highmark and UPMC to donate $2 million apiece for outreach and to reimburse the state for its role brokering the deal.

Pennsylvania's Department of Insurance required Highmark to detail a transition for UPMC patients as a condition of its April 2013 acquisition of West Penn Allegheny Health System. "For some time, the people of western Pennsylvania have been concerned about where and how they will receive their healthcare come Jan. 1, 2015," the governor said in a news release announcing the 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."

More detailed plans must be submitted to the state by the end of July, but the terms will give Highmark enrollees continued access to UPMC oncologists, specialists in behavioral health and pediatrics, and UPMC hospitals outside the competitive Pittsburgh marketplace. Highmark enrollees will be deemed in-network at all UPMC emergency rooms. Those already under UPMC care for a condition or procedure may continue until physicians agree to transfer patients to new providers and Highmark enrollees will have one year to find an alternative doctor.

Seniors in Medicare Advantage and other plans will continue to have in-network access to UPMC.

Deborah Rice-Johnson, president of Highmark Health Plan, the company's health insurance arm, said the deal offers continued in-network prices for key services and hospitals, including oncology, a major concern for Pittsburgh-area employers, she said.

The agreement also provides broader access to in-network rates for patients who transition out of UPMC. Seven UPMC hospitals will remain in-network through 2019, including UPMC's Hillman Cancer Center. The Children's Hospital of Pittsburgh will continue in Highmark's network through 2022. UPMC's Mercy in Pittsburgh will remain in-network through 2016. “It's hard to talk about what's excluded because so much is included,” she said.

UPMC's six flagship hospitals in and near Pittsburgh will be out of network, said Paul Wood, UPMC spokesman. The system welcomes Highmark's oncology patients. “We will gladly take you,” he said.

The announcement should end questions about a possible contract extension. “It's done,” Wood said. “It's over with. The community can move on. The market can move on. Employers know. People know. It's over.”

Follow Melanie Evans on Twitter: @MHmevans

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