Highmark says in the new complaint (PDF) that UPMC “profited enormously” by shifting oncology-related claims from the physician office to the hospital setting. Claims from hospital outpatient departments command higher reimbursement, as they usually include facility fees, which hospitals argue cover expensive staffing and overhead costs.
As an example, Highmark said one of its members started receiving chemotherapy treatment from a UPMC-affiliated specialist in October 2010. The patient's medical claims were originally sent to Highmark from the physician group. But two months later, without giving notice to Highmark, UPMC Presbyterian and UPMC Shadyside, the system's flagship facilities, started billing the same claims as outpatient hospital services “at significantly higher rates.”
Highmark is demanding a jury trial and seeking monetary damages. “We are now taking legal action in a continued effort to safeguard cancer patients from irrational billing practices,” Highmark said in a statement. “We believe it is our responsibility to bring this issue to light and make it possible for members to have access to the highest-quality care at an affordable rate.”
UPMC, however, dismissed Highmark's action. The health system called the suit a “meritless attack”and claimed Allegheny Health Network uses the same billing practices.
Several studies have found hospitals charge much higher rates for outpatient services than doctor's offices, even if the services provided are generally the same. Observers contend that hospitals have more negotiating power than smaller practices, which gives them a leg up on setting prices.
The government has also examined the issue. The Medicare Payment Advisory Commission has long advocated for site-neutral payments, meaning hospitals and ambulatory sites would get paid the same Medicare rate for surgeries and other procedures.
Follow Bob Herman on Twitter: @MHbherman
