UPMC says it will stop accepting Highmark Health’s Medicare Advantage as in-network

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Barely a year after a new state-mediated agreement between two rivals, the University of Pittsburgh Medical Center is moving to end its in-network contract for all of Highmark Health’s Medicare Advantage members, unless the Blue Cross insurer once again starts including facility fee payments in oncology reimbursement.

In early 2014, Highmark stopped paying what it deemed to be “markups” at UPMC outpatient oncology facilities for services such as infusion chemotherapy.  It was an attempt to “restore more rational payments,” the insurer 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.

That was before Highmark and UPMC entered into a state-brokered consent decree keeping in-network access for certain Highmark members, including seniors on Medicare Advantage. After Highmark acquired greater Pittsburgh’s second major hospital system, the Allegheny Health Network, and launched a new narrow network plan excluding UPMC facilities, UPMC wanted to end the contract with the insurer, but instead the two agreed to a mediated network scale-back.

Now, UPMC, western Pennsylvania’s largest provider and second-largest health plan, is fighting back against the oncology reimbursement changes, amid other skirmishes that haven’t been entirely solved by the consent decree.

“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.

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. Unless Highmark ends up changing course, UPMC will end network contracts covering Highmark’s Medicare Advantage plans effective in January 2016.  Last July's consent decree “explicitly contemplated this possibility, giving UPMC the right to withdraw from its Medicare Advantage arrangements with Highmark,” according to the UPMC statement.

“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 the dispute 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 Medicare plan is a version of the narrow network plan, and was introduced last fall, while premiums were increased by 25 percent and more for Highmark’s other MA plans covering some 180,000 seniors. UPMC and the Pennsylvania government challenged Highmark, arguing that the consent decree mandated that all Medicare plans keep UPMC in-network. But a judge sided with the Highmark, which argued that it could offer an Medicare Advantage plan without UPMC as long as it still sold other Medicare plans with UPMC.

In the latest oncology dispute, Pennsylvania’s new governor, Democrat Tom Wolf, is largely siding with Highmark. Wolf called UPMC’s plan to end network access “unacceptable” and vowed to pursue "all options to reverse this decision, including court action.”

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.

As the case is sorted out, UPMC is beckoning seniors to its own health plan, UPMC for Life Medicare Advantage, and also noting that other insurers include UPMC networks, 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 Medicare Advantage rates for this year, it lost some of its membership, as it has among employer groups, including a public school teachers' health plan concerned about UPMC Access. UPMC for Life, meanwhile, has reduced premiums for four of its six Medicare Advantage plans, and is pitching perks like 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.