UPMC accused of moving services to costlier hospital

Highmark adds to companies' dust-up

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After saying for months that UPMC was shifting some procedures to Magee-Womens Hospital to secure higher reimbursements, Highmark officials have now provided numbers -- more than 1,000 orthopedic, bariatric and other procedures were done in 2010 at Magee at costs 17 percent to 49 percent higher than if they had been done at other UPMC hospitals.

According to Highmark claims data, those shifts contributed to an 8 percent annual payment increase to UPMC from 2006 to 2009, from $652 million to $807 million. They also cited rate and volume increases as contributing factors for the increase over those years.

UPMC spokesman Paul Wood countered Tuesday that "For every one procedure [Highmark] 'claims' was shifted to higher reimbursement hospitals, I'll give you five that go the other way," citing the shift of some open heart and liver procedures from UPMC Presbyterian to UPMC Passavant, gynecology-oncology from Magee to Passavant and thoracic services from UPMC Shadyside to UPMC St. Margaret.

Such shifts of services are common among health systems, he said, including the West Penn Allegheny Health System that Highmark is acquiring. "Moving programs is done to improve patient care, quality and safety."

Under UPMC's current contract with Highmark, Magee is considered a specialty hospital and the insurer pays more for services provided there. The shift in services at Magee resulted in a 15 percent average annual payment increase from 2006 to 2009 from $99 million to $152 million.

Highmark officials maintain that bariatric surgeries, orthopedics and endocrine care are not related to women's health and could be done at lower cost facilities, such as UPMC hospitals Presbyterian/Shadyside, Passavant and St. Margaret.

Highmark says it reimburses services at Magee 17 to 19 percent more than at the Oakland and Shadyside facilities UPMC Presbyterian/Shadyside, 29 to 40 percent more than UPMC Passavant in McCandless and 37 to 49 percent more than UPMC St. Margaret in Aspinwall.

Mr. Wood called the data "obviously an internal study, likely self-defined and self-serving." He added: "If Highmark was so concerned about utilization, they would have been working on this with their employers over the past 10 years, not just surfacing this as an issue now."

Michael Weinstein, spokesman for Highmark, said the insurer began to notice the shifting of services about five years ago, and that the trend has increased steadily since.

Highmark officials also have objected to a change in UPMC's billing method for some services for cancer patients -- charging hospital outpatient rates for treatments provided in the same doctors' offices that were previously billed as an office visit -- which Highmark says has added $100 million in costs since the change went into effect in August 2010.

Mr. Wood said the change "is consistent with the way most academic medical centers nationwide provide oncology and other medical specialty care."

"UPMC is simply following the rules provided for in the contract Highmark negotiated with us."

That contract has become one of the most hotly debated issues locally, as it due to expire June 30 with a one-year run out period that at least covers hospital services for those with commercial insurance. Medicare recipients will not be affected.

UPMC has stated it will not renew the contract because of Highmark's plan to become a provider with the acquisition of the West Penn Allegheny Health System.

State Rep. Dan Frankel, D-Squirrel Hill, has introduced legislation that would require binding arbitration between the two parties that would at least cover UPMC's specialty hospitals.

While saying that "Highmark is not completely innocent," Mr. Frankel said Tuesday that the shifting of services is cause for concern.

"It's clear that these sorts of moves have had an impact on the increasing cost of health insurance and health care in our community.

"This might be acceptable if you're a New York Stock Exchange, publicly-held company but if you're a nonprofit that has a charitable mission and receive tax exemptions, just looking to enhance revenue at the expense of the community does not seem reasonable to me."

Steve Twedt: stwedt@post-gazette.com or 412-263-1963.


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