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UPMC vs. Highmark - What it Means for Western Pennsylvania Residents

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Earlier this year UPMC (formerly known as University of Pittsburgh Medical Center) announced that it would not renew its current hospital and provider contracts with Highmark when they expire on June 30, 2012. The reason? Highmark, which serves the 29 counties of Western Pennsylvania as Highmark Blue Cross Blue Shield, is acquiring the West Penn Allegheny Health System (WPAHS), UPMC's rival hospital network. UPMC says it can't be expected to do business with a direct competitor, although UPMC itself operates both a health care system and its own health plan.

Unless the two local health care giants come to a resolution, 4.8 million people in Southwest and Central PA could have to part ways with their preferred providers and critical health services beginning June 12, 2012. This includes people insured through their employers with Highmark, as well as out-of-state Blue Cross Blue Shield Plans, in addition to over 130,000 insured as individuals with Highmark (UPMC Health Plan doesn't currently offer individual insurance plans).

Important Facts:

  • Highmark’s contract for services at certain UPMC hospitals are not currently affected, including UPMC Hamot in Erie (expires in 2013), UPMC Mercy (expires in 2015) and Children’s Hospital (expires in 2022). Access to other UPMC facilities, including specialty hospitals such as Hillman Cancer Center and Magee Women's Hospital, is impacted, however, as things stand now.

  • If the contracts are not re-negotiated, Highmark and other Blue Cross Blue Shield customers will still have access to UPMC hospitals and physicians, but only by paying out-of-network rates which could make it unaffordable for most.

Latest Developments

Democratic lawmakers from Western Pennsylvania, including State Representatives Tony DeLuca (Penn Hills), Brian Barbin (Cambria) and Dan Frankel (Squirrel Hill), are currently seeking legislative solutions to the stalemate between health care giants UPMC and Highmark. They are also calling for Governor Tom Corbett to get involved.

Use of a provision of state law known as Act 94 of 1975 is being considered by the Pennsylvania Insurance Department to delay the June 2012 deadline by six months, giving time for facilitation of possible continued negotiations between Highmark and UPMC, as well as more time for PA consumers and employers to consider alternative healthcare options. The Insurance Department cannot under current law force Highmark and UPMC to enter into a contract, but could potentially extend any contract termination until at least the end of April in 2013.

Highmark / UPMC FAQ (Pennsylvania Insurance Department)
Local Lawmakers Seek Legislative Solution to UPMC-Highmark Stalemate (Plum-Oakmont Patch)
UPMC Seeks to Assure on Medicare, Medicaid (Pittsburgh Tribune Review)

Background

Provider contract talks to negotiate the rates that Highmark pays UPMC for its members to use UMPC hospitals and doctors began to break down in April 2011, following Highmark's announcment that they hoped to acquire the struggling 5-hospital West Penn Allegheny Health System. “Having announced its intention to compete with UPMC as a provider, there cannot be any reasonable prospect for a contract renewal between Highmark and UPMC,” UPMC spokesman Paul Wood said. “Highmark and UPMC have made business decisions, which enhance choice and competition in the region. Negotiations are not the issue.”
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