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Judge: UPMC must provide in-network access to Highmark Medicare members

More than 180,000 seniors who rely on Highmark Inc. for Medicare Advantage will keep in-network access to UPMC at least until 2019, Commonwealth Court President Judge Dan Pellegrini ordered Friday.

His three-page decision commands the Downtown-based rivals into binding arbitration to resolve other disagreements they cannot settle on their own — a move that delighted Gov. Tom Wolf and Attorney General Kathleen Kane.

UPMC vowed to appeal to the state Supreme Court.

“The feud between these two companies must end — the people of Western Pennsylvania have had enough,” Wolf said in a statement.

The governor said he would not let the elderly become “pawns in the dispute” between Highmark, the region and state's dominant health insurer, and UPMC, the region's largest hospital system. His administration and Kane sought the court intervention.

The companies' long-simmering conflict boiled over in April, when UPMC said it would cut in-network access in 2016 for about 182,000 Western Pennsylvanians enrolled in Medicare Advantage health insurance through Highmark.

UPMC executives said they had no choice because Highmark owes about $143 million for cancer care that the system provided to Highmark customers since February 2014. Highmark maintains in a pending lawsuit that the hospital system overbilled for cancer treatments by $300 million.

“We think the judge was entirely wrong in terms of ignoring all the evidence that was presented,” UPMC spokesman Paul Wood said, alleging Pellegrini wrote “an arbitrary and capricious order that far exceeds (his) jurisdictional authority.”

Highmark welcomed the decision and pledged to work out any spats under the state-brokered consent decree that both companies signed in June.

“It goes without question that Highmark is pleased the Commonwealth prevailed to protect 182,000 seniors in our community,” company spokesman Aaron Billger said.

The decree spells out how the nonprofit companies should navigate their disintegrating relationship since Dec. 31, when a longstanding contract that gave Highmark customers in-network access to UPMC expired.

Language in the decree allows patients with certain medical conditions to have extended in-network access to UPMC hospitals and doctors, and it specifies protections for vulnerable populations, such as elderly individuals.

Pellegrini ruled Medicare Advantage enrollees fall under part of the decree addressing at-risk communities, though he did not specify any breaches of the agreement.

Kane spokesman Chuck Ardo said the order reaffirmed the attorney general's position. Kane and the Wolf administration had argued that the UPMC decision on Medicare Advantage broke the decree.

“The parties have to start doing what they are supposed to do. It's not complicated,” Ardo said. “They need to take responsibility and move forward.”

UPMC has argued that Medicare Advantage enrollees under Highmark could retain in-network access by changing insurers.

Kane and the administration said in a joint motion last month that both companies violated the decree at different points. A deputy prosecutor said the companies had “blown through” at least seven deadlines meant to help patients cope with the changing landscape for health care.

The motion lists several areas where Highmark and UPMC remain at odds, including in-network rates and patient transfer protocols for emergency rooms and trauma services.

Pellegrini ordered both sides to list any unresolved matters by July 1 and to pick an arbitrator.

They must finish arbitration on the issues by Sept. 30 and supply monthly updates to the state, wrote Pellegrini, who presided Wednesday at a 10-hour hearing on the case.

The judge also told the companies not to alter any contract or business relationship between them without court approval.

At the Insurance Federation of Pennsylvania in Philadelphia, President Sam Marshall questioned that demand. He said competition in Western Pennsylvania intensifies as Highmark and UPMC fight.

Insurer UPMC Health Plan is a federation member.

“Experience in the world of insurance has shown that consumers benefit most when competitors compete — not when they collude, whether on their own or under the supervision of a government agency,” Marshall said. “We hope the judicial and regulatory intervention here doesn't lose sight of that.”

Adam Smeltz is a staff writer for Trib Total Media. He can be reached at 412-380-5676 or [email protected].


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