State officials jump into UPMC-Highmark dispute, push binding arbitration

A state court should force rivals Highmark Inc. and UPMC into binding arbitration to resolve bitter disputes that have left Western Pennsylvanians confused and angry over their access to health care, Gov. Tom Wolf and Attorney General Kathleen Kane said Monday.

In a joint motion in Commonwealth Court, the Wolf administration and Kane accused both Downtown-based companies of breaking a state-brokered consent decree they signed in June. UPMC violated the terms most recently when it chose to block in-network access for Highmark's Medicare Advantage customers starting in 2016, state attorneys wrote.

“ ‘Frustration' is the word that's printable in a family newspaper to describe our view of these guys,” said James Donahue, executive deputy attorney general for public protection, referring to both companies.

Highmark said it welcomes enforcement of the agreement while UPMC questioned the demand for arbitration.

The companies have “blown through” at least seven deadlines for agreements meant to help patients navigate the dissolving relationship between the groups, Donahue said. “I don't know, on balance, if one is more wrong than the other.”

A longstanding contract that gave Highmark insurance customers in-network access to UPMC doctors and hospitals expired Dec. 31. That left the consent decree to smooth the transition with extended UPMC access for treatment of certain medical conditions, among other provisions.

Yet the companies have clashed over how to interpret the agreement. In one instance, they fought in January over dozens of claims for children undergoing care at UPMC.

UPMC this month announced plans to sever in-network access for about 182,000 seniors enrolled in Medicare Advantage through Highmark, the dominant health insurer in Pennsylvania.

Wolf and Kane called that a direct violation of the consent decree, which they said should safeguard “vulnerable populations” such as children and the elderly. Wolf cast UPMC's move as “the final straw” after good-faith discussions and said he “will not allow our most vulnerable citizens ... to be used as pawns in the dispute.”

UPMC spokesman Paul Wood said state officials have “no substantive or legal basis for any of (their) misinformed claims” against the hospital system, the largest in Western Pennsylvania.

“Nor does requiring arbitration solve the issues that divide Highmark and UPMC,” Wood said in a statement. He has said UPMC must drop the Medicare Advantage contract with Highmark because the insurer owes about $143 million for cancer care that UPMC provided to Highmark customers since February 2014.

UPMC maintains Medicare Advantage customers can retain access to the hospital system by switching insurers during open enrollment that starts in October.

Wood said Highmark has dragged its feet on resolving a related legal matter, a pending lawsuit that alleges overbilling by UPMC for cancer care. State attorneys contend in their motion that Highmark's lawsuit undermines protection for vulnerable populations under the consent decree.

Highmark spokesman Aaron Billger said the insurer is reviewing the motion but would “continue to work cooperatively with the commonwealth to protect consumers.” He said the company welcomed enforcement of the decree.

“There needs to be certainty in the marketplace, and the confusion must end. But it's disappointing that it takes litigation,” Billger said.

Rep. Dan Frankel, D-Squirrel Hill, said the legal action shows the Wolf administration is ready to show force and bring clarity.

Wolf will “not accept continuing bickering that is jeopardizing the health welfare of millions of people in Western Pennsylvania, let alone 180,000 senior citizens who are positioned to lose access to their doctors and hospitals,” Frankel said.

The motion lays out several areas in which Highmark and UPMC remain at odds, including in-network rates and patient transfer protocols for emergency rooms and trauma services and reimbursement rates for select hospitals. The companies also need to sort out the processing for disputed claims and guidelines for when patients can keep seeing their physicians on an in-network basis, according to the motion.

Donahue said it's up to the court to decide whether to enforce arbitration and set a schedule for the process. He said state officials will suggest the arbitration should be complete by the end of the summer.

“We're trying to achieve some level of understandability and definiteness to what consumers can expect,” Donahue said.

Adam Smeltz is a staff writer for Trib Total Media.