Pennsylvania House panel weighs Highmark-UPMC proposal

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HARRISBURG -- Depending on who was speaking, a House panel Wednesday heard that bills targeting the ongoing dispute between the UPMC health system and insurer Highmark would be either a very good or very bad deal.

The legislation from Rep. Jim Christiana, R-Beaver, and Rep. Dan Frankel, D-Squirrel Hill, would require hospitals operating as part of an integrated delivery network -- such as UPMC, which operates both a hospital network and a health insurance company -- to contract with any willing insurer.

The bill would mean hospitals couldn't favor some insurers while locking out others. It's a hot topic in southwestern Pennsylvania, where the contract between UPMC and Highmark is set to expire at the end of 2014, threatening to leave customers of the Pittsburgh region's dominant insurer without in-network access to the practitioners of its dominant health care provider.

The House Health Committee heard hours of testimony Wednesday from Highmark, UPMC and others in the industry.

Highmark CEO William Winkenwerder Jr. told the committee that the bills in question would stimulate competition and allow people to choose both their preferred health plans and their preferred doctors. He said the state must guard against a situation in which a dominant health care system controls the price of medical care.

Committee members heard the opposite from a senior vice president and chief legal officer of UPMC, Tom McGough, who said Highmark's acquisition of the West Penn Allegheny Health System meant the insurer would have to make UPMC unaffordable for its subscribers, in effect steering customers to seek medical services at Highmark's own new system.

Others in the industry voiced concerns -- in spoken and written testimony -- about the bills. Henry Miller, director of health analytics of Berkeley Research Group, who has worked as a consultant to UPMC Health Plan and Highmark Blue Cross Blue Shield, said the proposal would allow insurers to pay hospitals at rates below costs.

And Paula Bussard, senior vice president of the Hospital & Healthsystem Association of Pennsylvania, said the proposal would harm competition by lessening the incentive for providers and insurers in crafting benefit packages.

Nurses who testified alongside the president of SEIU Healthcare Pennsylvania, a union which is trying to organize UPMC service and maintenance workers, applauded the bills.

Committee Chairman Matt Baker, R-Tioga, said members need time to review the testimony. Mr. Frankel said the legislation might need adjustments before it would be ready for passage.

Karen Langley: or 717-787-2141.

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