Highmark and UPMC feud over canceled physician contracts
Highmark Inc. said Thursday it terminated contracts with 689 UPMC physicians in the Pittsburgh region to make clear that the doctors would be out-of-network for the insurer’s subscribers on Jan. 1.
UPMC called Highmark’s move an “illegal breach” of the contracts and said the state’s largest health insurer has “no legal right” to selectively terminate physician agreements.
Consent decrees negotiated with Gov. Tom Corbett and Attorney General Kathleen Kane this summer were meant to provide for an orderly breakup between the health giants and calm an escalating three-year war for customers in Western Pennsylvania, but the battle continued Thursday over the contract terminations.
“This is simply the next step by an increasingly desperate Highmark to exclude all UPMC physicians from all products they offer,” UPMC spokesman Paul Wood said.
He declined to comment on what action the region’s biggest hospital system would take. The consent decrees call for binding arbitration to settle disputes.
Highmark ended the contracts because UPMC refused to do so, said Tom Fitzpatrick, Highmark’s senior vice president of provider contracting.
If the contracts had remained in place, Highmark would have had to list the UPMC physicians as in-network in its directories and on its website. Under the terms of the consent decrees, about 20 percent of UPMC’s physicians will be out-of-network on Jan. 1.
“We needed to ensure that our members would be clear when they make determinations of which doctors are in and which doctors are out,” Fitzpatrick said.
Under the consent decrees, Highmark members have limited access to some UPMC facilities and physicians. For instance, all UPMC hospitals outside the Pittsburgh region, such as those in Altoona, Bedford and other rural areas, and specialty hospitals such as Children’s and Western Psychiatric Institute and Clinic, are in-network.
And UPMC doctors who have admitting privileges at independent community hospitals can see Highmark members at those facilities, such as St. Clair Hospital in Mt. Lebanon or Heritage Valley Health System hospitals in Sewickley and Beaver.
The 689 UPMC doctors whose contracts Highmark terminated only practice in the Pittsburgh region, Fitzpatrick said.
UPMC and Highmark have been fighting since 2011, when Highmark announced it would buy West Penn Allegheny Health System and convert into an integrated health system with both insurance and hospital operations. UPMC responded by saying it would not renew reimbursement contracts that give Highmark members in-network access to UPMC hospitals and doctors.
A 2012 agreement between Highmark and UPMC, also negotiated by Corbett, called for their contracts to expire at the end of this year.
Public outcry over the potential loss of affordable access to unique UPMC medical services led officials to negotiate the consent decrees.
Alex Nixon is a staff writer for Trib Total Media. He can be reached at 412-320-7928 or [email protected].