Three years ago today, board members from Highmark Inc. and West Penn Allegheny Health System announced a new “capital partnership,” bringing together the region’s dominant insurer and its second largest health system.
The announcement set off an often-acrimonious standoff with UPMC, which vowed it would not renew its contract with Highmark now that the two organizations would be competing directly for patients.
On Friday, the announcement of a five-year consent decree that state officials brokered appeared to bring at least a momentary truce to that war, but not before Highmark endured a succession of three CEOs and a brief court battle to block West Penn Allegheny from bolting, and not until UPMC took on a relentless barrage of public and political criticism for what many saw as the uncharitable act of denying in-network access to Highmark members.
The latest in that succession of Highmark Health CEOs, David Holmberg, said Friday that while the insurer didn’t get the full loaf that it wanted — that is, a new, full-access contract with UPMC — the new “transition” agreement gives Highmark’s commercial customers in-network entry to half of UPMC’s hospitals and to key UPMC services such as emergency room and oncology-related treatments.
“We think that’s really big,” said Mr. Holmberg, who has been Highmark’s CEO for just more than a month. Mr Holmberg spoke at Friday’s Harrisburg news conference with UPMC Chief Legal Officer Tom McGough, Republican Gov. Tom Corbett, Democratic Attorney General Kathleen Kane and several other state officials.
“We hope that this is a new beginning and the tone changes” between rivals UPMC and Highmark, Mr. Holmberg said.
The tone changed for nearly several minutes, until Mr. McGough, an attorney with a more formal approach, spoke. While Mr. Holmberg cracked a few jokes and spoke about the two companies “putting their swords down and doing the right thing,” Mr. McGough stuck to his prepared script, saying that the agreement represented “an expiration” of the current relationship between Highmark and UPMC.
The back-and-forth continued. During the news conference, Mr. Holmberg and Mr. Corbett trumpeted ongoing oncology access for Highmark commercial customers, with Mr. Corbett saying Highmark customers would stay with their UPMC oncologist “until you’ve beaten the disease, even if that takes years.” Deborah Rice-Johnson, president of Highmark’s health plan division, stressed that Highmark commercial customers have “100 percent access to [UPMC] oncology care.”
Minutes later, UPMC put out a news release telling patients that UPMC’s Hillman Cancer Center, while technically available by physician referral to all Highmark customers, “is not in-network” and reminding area businesses that “the only way a patient can be assured of full, in-network access to the UPMC doctors and hospitals they most want — and [in a way] that is not subject to Highmark’s whims — is to change insurers now.”
The consent decree says this: “Highmark subscribers may access, as if in-network, UPMC services, providers, facilities and physicians involved in the treatment of cancer, if a patient’s treating physician determines that a patient who is diagnosed with cancer should be treated by a UPMC oncologist and the patient agrees to be so treated,” at rates that are still being negotiated.
While UPMC downplayed the significance of the five-year decree, Highmark and state officials seemed pleased. Mr. Corbett said it was “significant in scope, significant in duration and detail ... [it gives] long-term access and clarity” to patients who want to keep their Highmark insurance and their UPMC doctors and specialists.
Although the two health care giants did not meet face-to-face during the negotiations — except for one meeting between Mr. Corbett and the companies’ board chairmen, and the chances of renewing or extending the current full-access contract now seem remote, Mr. Holmberg said the agreement brings some certainty and stability to a market where the region’s largest insurer and largest provider have waged a war of words — and, sometimes, lawsuits — for years.
Mr. Holmberg said the agreement is “a fair and appropriate first step,” adding that, “people matter, and we’ve worked very hard to get this figured out and to do what was right for our members and for the patients and the people of Western Pennsylvania.” While the basic framework of the agreement was hashed out earlier in the week, attorneys and mediators worked through a few outstanding details until 2 a.m. Friday, Mr. Holmberg said.
Ms. Kane, the attorney general, said that the consent decrees, which the health care giants finalized this week, clarify some of the lingering continuity-of-care issues for Highmark commercial subscribers who currently use UPMC doctors or might need one in the future.
Friday’s agreement “was a better course of action” than a protracted legal battle because “we need the resolution now ... we wanted a good solution for the consumers, and I believe and I think everyone here would agree that the consent decree does do just that.”
Technically, her office filed a lawsuit against UPMC as well as Highmark. That “petition for review,” which was also filed Friday in state Commonwealth Court, was then instantly resolved with the signing and filing of the consent decrees. The suit claimed violations of the Unfair Trade Practices and Consumer Protection Act and state insurance law. The complaint further alleged that Highmark and UPMC breached their previous mediated agreements and that UPMC engaged in “unfair conduct” that might have caused substantial financial injury to consumers.
Ms. Kane said that Highmark and UPMC will give the state $2 million each to fund the state’s communications efforts regarding the new deal, and that both companies have sworn not to engage in deceptive or misleading advertising.
The consent decrees, barring revision or a new contract, will remain in effect for five years, and should a conflict ever arise between the two organizations over the enforcement of the agreements, an arbitration process will settle them.
State Rep. Dan Frankel, D-Squirrel Hill, who has introduced legislation that would require UPMC and other providers to provide “any willing insurer” in-network access, said the agreement “addresses many of the issues of biggest concern to my constituents and me,” such as protecting senior citizens and vulnerable patients, but he added that “we still need a broader solution” to protect patients from being “forced to pay outrageous rates for care.”
Eight of UPMC’s 16 major hospitals will remain in-network for Highmark customers starting Jan. 1: Children's Hospital, UPMC Bedford Memorial, UPMC Northwest, UPMC Altoona, UPMC Hamot, UPMC Horizon and Western Psychiatric Institute and Clinic, and UPMC Mercy (Mercy is in-network through mid-2016, Children’s through June 2022, and the rest through at least 2019). Many UPMC-affiliated doctors who have admitting privileges at other hospitals also could remain in-network for Highmark customers.
UPMC’s urban and flagship hospitals — Magee-Womens, Montefiore, Passavant, Presbyterian, Shadyside, St. Margaret, McKeesport and UPMC East — will still remain out of network when the divorce goes through.
While UPMC has said, for years, that it is no longer interested in a full-access contract with Highmark, Ms. Rice-Johnson said that she never shuts the door on any relationship.
“I’m still open to having a broad network contract someday,” she said. “Anything could happen.”
Bill Toland: firstname.lastname@example.org or 412-263-2625. Steve Twedt: email@example.com or 412-263-1963. Karen Langley: firstname.lastname@example.org, 717-787-2141 or on Twitter @karen_langley. First Published June 27, 2014 10:21 AM