Bill that could extend Highmark-UPMC contract passes committee
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Legislation that would give the state insurance commissioner greater authority to extend the terms -- by up to three years -- of a contract between Highmark Inc. and UPMC cleared a state Senate committee today.
Now the legislation must be considered before the full Senate, and then approved by the House and governor, before it becomes law.
The state Senate Banking and Insurance Committee approved the legislation unanimously today, according to its two main sponsors, Sen. Don White, R-Indiana, and Sen. Jay Costa, D-Forrest Hill.
In a statement, Mr. White said: "After hearing testimony and considering submissions by consumers, physicians, advocacy groups, and the primary parties involved in this dispute, it would be unacceptable to allow physicians' contracts to expire on June 30, 2012 without state action. We as legislators cannot simply stand on the sidelines and watch consumers get pushed off a cliff."
In a statement, Highmark said it "applauded" the Legislature's efforts to keep the two health-care providers negotiating.
"Because UPMC has been unwilling to resume contract negotiations with Highmark," the company said in the statement, "Highmark has encouraged bipartisan government action to stabilize the health care marketplace and to ease the concerns and anxiety of the region's citizens.
Mr. White seemed to say both were at fault.
"Since neither side seems willing to work towards reaching an agreement, it becomes more and more apparent that legislative action will be necessary."
If the bill becomes law, and if the state insurance commissioner, Michael F. Consedine, were to apply the new law in its fullest terms, the UPMC-Highmark contract could be extended until July 2015.
Under current law, known as Act 94, the Pennsylvania Insurance Department can suspend the termination of a contract between a hospital and an insurer by up to six months.
The bill moved out of committee today, Senate bill No. 1358, would also ensure that physician services are provided to subscribers at in-network rates when a hospital and insurer are subject to Act 94.
That means UPMC couldn't allow Highmark subscribers access to their hospitals, but deny them access to the doctors in those hospitals, as UPMC has threatened it would do by nixing its physicians' contract with Highmark next year.
Highmark and UPMC are nearing the end of a 10-year reimbursement contract that sets the rates Highmark pays for UPMC services, and gives Highmark's millions of policyholders wide access to UPMC facilities.
Highmark says it wants to negotiate a new contract with UPMC; UPMC says it won't and can't do so, now that Highmark is in the process of acquiring the No. 2 health system in the region, the financially troubled West Penn Allegheny Health System.
First Published December 13, 2011 12:00 am