UPMC, Highmark health contract bout reaches Erie

The contract battle between Pittsburgh’s two biggest health organizations moved north to Erie on Thursday as hospital giant UPMC and insurer Highmark Inc. bickered over whether Highmark members in northwest Pennsylvania would be able to go to UPMC Hamot next year.

It is the latest front to open in the ongoing war for Western Pennsylvania’s health care market. UPMC and Highmark have fought through dueling advertisements and in public hearings, courtrooms and the state General Assembly for the past three years.

UPMC, which has refused to renew a contract with Highmark covering UPMC hospitals in Allegheny County, said it wants Highmark insurance customers to have in-network access in Erie when the contract expires at the end of this year.

But Highmark, the state’s largest health insurer, said it would include UPMC Hamot in its network only if UPMC negotiated a comprehensive contract covering all UPMC hospitals and doctors.

The two nonprofit institutions have been fighting since 2011 when Highmark said it would buy the five-hospital West Penn Allegheny Health System and convert it into a direct competitor with UPMC in the medical provider business. In addition to buying West Penn Allegheny last year, Highmark purchased Jefferson Regional Medical Center in Jefferson Hills and St. Vincent Health System in Erie.

The UPMC-Highmark contract, which gives Highmark members less-costly in-network rates for using UPMC medical services, expires at the end of this year for most of UPMC’s 20 hospitals. The two organizations are negotiating standalone contracts for several UPMC hospitals in rural areas, such as Altoona, Bedford and Seneca, and for specialty hospitals such as Children’s Hospital of Pittsburgh and Western Psychiatric Institute and Clinic.

Highmark spokesman Aaron Billger said UPMC was “toying with the community” by picking only certain hospitals to have contracts, rather than opening its entire system to Highmark’s two million members in Western Pennsylvania.

“This is a blatant example of how UPMC is picking and choosing which communities it wants to have access to,” Billger said.

UPMC spokesman Paul Wood said Highmark backed out of ongoing talks over a contract covering UPMC Hamot and was reneging on a commitment not to let the fight in Pittsburgh spill over into Erie.

“They indicated to us they fully intended to have a contract for Hamot, and now they’ve changed their minds,” Wood said.

Billger said Hamot was mentioned by UPMC negotiators during contract talks on the rural and specialty hospitals, but Highmark has never said it would have a separate contract for the Erie medical center.

The rhetoric between the health giants is growing more fierce with the contract expiration less than 12 months away.

UPMC, which stands to lose millions of dollars a year from Highmark members, has been trying to persuade employers and individuals to drop Highmark as their insurer and switch to a plan that will offer full in-network access to UPMC.

Highmark, which is trying to hold onto its members, has lobbied for lawmakers in Harrisburg to get involved in the dispute and pass legislation that would force UPMC into a contract.

Alex Nixon is a staff writer for Trib Total Media. He can be reached at 412-320-7928 or anixon@tribweb.com.