Budget Highmark Medicare plan that drew judicial review adds hospitals to network
A controversial Medicare plan devised by Highmark Inc. is gaining broader acceptance by community hospitals that stayed on the sidelines when the product was introduced last month, making the plan more attractive to seniors living in suburban Pittsburgh.
The state’s largest health insurer said Butler Health and St. Clair Hospital joined its Community Blue Medicare HMO network, a week after a judge in Harrisburg ruled the plan does not violate an agreement Highmark has with the state over the end of its contract with UPMC.
The deals give subscribers of Highmark’s Medicare Advantage plan, which excludes all UPMC hospitals, access to key facilities in Mt. Lebanon and Butler County. It also helps the hospitals keep patients coming through their doors.
“Hospitals don’t want to give up any possibility of filling beds,” said Tom Tomczyk, a principal in the health care practice at Buck Consultants, Downtown.
“Hospitals need to fill those beds and fill those emergency rooms,” Tomczyk said. “There’s a heck of a lot more downside in not participating.”
Highmark is the biggest Medicare Advantage carrier in Western Pennsylvania, with 145,000 members. It offered the plans as a low-cost alternative to products that provide broad access to doctors and hospitals, including UPMC.
Medicare Advantage is an alternative to traditional Medicare, in which the federal government contracts with private insurance companies to administer Medicare benefits to seniors.
The private plans are especially popular in the Pittsburgh region. According to data from the Kaiser Family Foundation, a nonprofit research organization in California, 62 percent of Medicare beneficiaries in Allegheny County are enrolled in the private plans. In Butler County, it’s 56 percent. By comparison, 30 percent of beneficiaries nationwide are.
Tim Lightner, Highmark’s vice president of senior markets, declined to discuss specifics of the negotiations leading to the agreement with Butler and St. Clair. But he said Community Blue Medicare is proving popular among seniors.
“One potential driver of the change may be the demand we’re seeing in the marketplace,” said Lightner, who noted that the insurer did not offer the hospitals better financial terms to participate.
So far during Medicare’s open enrollment period, which started Oct. 15 and runs through Dec. 7, 20 percent of Highmark’s enrollment has been in Community Blue, Lightner said. He didn’t say how many people were enrolled in the plan.
“It’s a little ahead of where we thought we would be at this point,” he said.
Officials with St. Clair and Butler declined to comment.
Highmark is in talks with other hospital systems about signing on with Community Blue Medicare, which if successful, would give seniors in-network access to nearly all non-UPMC hospitals in the seven-county Pittsburgh region.
Excela Health, which operates three hospitals and a network of physicians in Westmoreland County, recently restarted talks with Highmark, spokeswoman Jennifer Miele said.
“We’re back at the table with Highmark, and we’re hoping to work something out,” said Miele, who declined to comment further.
In Westmoreland, 66 percent of Medicare beneficiaries are enrolled in a private plan.
Lightner declined to name other systems with which Highmark is in talks.
Washington Hospital is not a participating provider in Community Blue Medicare. Officials with the Washington County hospital could not be reached for comment. Sixty percent of Medicare beneficiaries in Washington County are in private plans.
When Highmark rolled out the Medicare Advantage plan Oct. 1, its limited network attracted attention for excluding UPMC’s expansive system of hospitals and doctors. UPMC threatened to sue over the plan, stating it violated the agreement that the warring health giants negotiated with Gov. Tom Corbett and Attorney General Kathleen Kane this summer.
Kane and Corbett’s health secretary and his insurance commissioner sued, arguing that Highmark had promised all seniors would have access to UPMC.
Commonwealth Court President Judge Dan Pellegrini ruled last week that the state’s consent decree with Highmark only required UPMC to offer access to all Highmark Medicare subscribers, not the other way around.
Michael Cassidy, a health care attorney with Downtown firm Tucker Arensberg, said he suspects the hospitals waited to see how UPMC and the state would react to Community Blue Medicare before agreeing to join. Once Pellegrini ruled, they probably felt more comfortable signing on.
“Why would they accept all of Highmark’s other products and not this one?” Cassidy asked.
Alex Nixon is a staff writer for Trib Total Media.