UPMC has won a key legal victory that could ultimately award the health system more than $188 million in back payments from insurance giant Highmark.
The Pittsburgh-based system disclosed Tuesday that a three-person arbitration panel awarded it about $23.9 million, at an interest rate of 6%, after determining that Highmark had reimbursed UPMC Presbyterian Shadyside Hospital below contracted rates for certain oncology services. The dispute covers the period between April 1, 2014 and Oct. 28, 2015.
Although the ruling applies only to Shadyside, UMPC said the decision will ultimately extend to all of its hospitals. It is estimating the total amount owed, but said it believes it will be above $188 million (PDF).
“UPMC and Highmark have agreed that this result determines the amount owing for all other oncology services provided at UPMC facilities from April 1, 2014 through the date of the award,” the system said in a disclosure to bondholders.
The turf war between UPMC and Highmark has become increasingly bitter as UPMC has sought to end all ties with the insurer, despite the objections of state legislators and Highmark itself.
The bad blood stems from Highmark's 2013 acquisition of UPMC rival West Penn Allegheny Health System to create one of the country's largest integrated delivery networks.
The prolonged dispute has even affected UPMC's credit rating, and the favorable decision is likely to be a relief to investors. UPMC, however, is still awaiting a separate ruling from the Pennsylvania Supreme Court on whether it can terminate its Medicare Advantage contracts with Highmark as of Jan. 1.
