Highmark lawsuit against UPMC centers on billing for cancer drugs
UPMC and three physician groups overbilled for cancer drugs by $300 million since 2010, Highmark Inc. claims in a lawsuit filed on Wednesday in Allegheny County Common Pleas Court.
“The cost of oncology drugs has tripled as treatment provided in a physician's office is being billed as a higher-cost hospital outpatient service,” Highmark said.
Highmark is seeking recovery of the overbilled amounts plus interest and legal costs. Spokesman Aaron Billger said the company, if successful, would return the money to its customers.
A UPMC spokesman said Highmark is trying to short-circuit an ongoing rate arbitration between the two companies.
“Highmark's latest lawsuit is not only a meritless attack on a reimbursement system Highmark itself designed and endorsed, but also a blatant violation of the consent decree it entered with the commonwealth of Pennsylvania just two months ago,” said UPMC spokesman Paul Wood.
The decree requires Highmark to use its “best efforts” to resolve the dispute through arbitration by the end of the year, he said. Highmark's Allegheny Health Network system uses the same billing practices that it complains about in the lawsuit, Wood said.
The lawsuit by Highmark is at the leading edge of similar lawsuits, said Alwyn Cassil, a health policy expert and consultant with Policy Translation in Silver Spring, Md.
“Highmark appears to be at the forefront in confronting hospitals about these facility payments,” she said.
Insurers have been complaining about the practice of shifting billing from doctors offices to hospital outpatient facilities for years, but it's become more of a concern in the last five years as hospitals aggressively buy up physician practices, she said.
Ultimately, it's a consumer issue, Cassil said.
“At the end of the day, you and I are paying that extra money,” she said. “The insurer is just the middleman.”
The National Institute of Health Care Reform in June released a study showing that hospitals charge about twice as much as doctors offices for the same services.
The lawsuit claims UPMC, eight of its hospitals and the three physician groups breached their contract with Highmark and a subsidiary, Keystone Health Plan West Inc.
The physician groups had contracts requiring them to provide infusion chemotherapy services at their offices at rates lower than what UPMC hospitals charged for providing the same treatments on an outpatient basis, the lawsuit states.
Starting in August 2010, they started shifting their patients' billing to the hospitals without changing where and how they were treated, the lawsuit says. More recently, UPMC has been transferring patients' billing to the hospitals with higher rates, the lawsuit says.
Specifically, a patient being treated at the Hillman Cancer Center is being billed as a patient of Magee-Womens Hospital, which charges higher rates because it's a specialty women's hospital, the lawsuit states.
Highmark and Keystone unilaterally reduced the reimbursement rates for the UPMC hospitals in February because of the billing practices, the lawsuit says.
In addition to the money damages, Highmark is seeking a court order confirming the lower rates.
Brian Bowling is a staff writer for Total Trib Media. He can be reached at 412-325-4301 at bbowling@tribweb.com.
