Highmark not impressed with offer from UPMC

Highmark on Tuesday found little to like in UPMC’s offer on Monday to give Community Blue subscribers access to UPMC facilities in exchange for UPMC being able to balance bills for out-of-network charges.

“Our lawyers are reviewing their proposal and will be back in touch with UPMC,” said Highmark spokeswoman Kristin Ash. “[But] it does not seem like an option that can be implemented, as it would require a contract amendment and would put our members at risk for owing thousands or tens of thousands [of dollars].”

UPMC made the offer in a letter to Highmark and a statement sent about 20 minutes before a House Democratic Policy Committee hearing in Pittsburgh on UPMC’s refusal to give access to subscribers of Community Blue, according to Ash.

Community Blue is available in Blair and most of its contiguous counties.

At the hearing, Community Blue subscribers spoke about needing to break away from their UPMC doctors for illnesses, and Highmark officials bashed UPMC for what those officials called a nationally unprecedented abandonment of patients.

According to Highmark, UPMC agreed through mediation in 2012 to the current version of Community Blue, which includes a clause calling for Highmark to pay UPMC directly for services rendered to Community Blue subscribers, even though those subscribers would be essentially “out-of-network.”

In an unusual arrangement, that payment would have been 10 to 20 percent higher than Highmark pays UPMC for in-network services for subscribers of Highmark’s other plans, according to Ash.

Otherwise, those Community Blue subscribers would have had to pay regular out-of-network charges, which would have been enormous, according to Ash.

The problem occurred with Community Blue when UPMC didn’t agree to treat subscribers for whom Highmark had negotiated the special payment arrangement, she said.

In addition to getting paid “at a rate that is generally higher than the rate for in-network Highmark products,” UPMC would receive payment directly from Highmark, eliminating the burden of collecting from patients, Highmark Health Markets President Michael Fiaschetti said.

The Community Blue subscriber would have a higher co-insurance payment for a UPMC service than for an in-network one, said Donald Fischer, Highmark’s chief medical officer.

“Highmark wanted Community Blue to be a classic bait-and-switch, with UPMC’s facilities and physicians being used as the bait to lure subscribers to Community Blue, only to switch them into other systems, most obviously West Penn Allegheny,” said UPMC spokesman Paul Wood on Wednesday. “The additional fee that Highmark would charge Community Blue subscribers for out-of-network access to UPMC would presumably be set at whatever level was necessary to move the desired number of patients into West Penn Allegheny.”

While Highmark said its payment to UPMC would have been a 10 to 20 percent markup on the negotiated norm, UPMC said it actually would have been “no more than if those services were provided in-network,” based on the plan’s “obsolete formula,” according to Thomas McGough, UPMC’s chief legal officer, in a letter to the Democratic Policy Committee.

The contract expressly prohibits UPMC from “balance billing” for out-of-network services in the traditional sense, McGough said.

UPMC hasn’t allowed subscribers to pay in full in cash and UPMC didn’t hide its intention to refuse to treat Community Blue patients, except in designated facilities and situations, according to McGough.

In its offer this week, UPMC suggested a contract amendment.

“Under this proposal, UPMC will employ the well-established reimbursement method used by every other insurer and health care provider,” Wood stated. “UPMC would determine the out-of-network charges to be billed directly to the Community Blue subscriber, and Highmark would determine the amount it would reimburse to the subscriber.”

Community Blue will go away at the end of 2014, when the overall contract between UPMC and Highmark expires, both sides said.

At that time, UPMC doesn’t plan to renew any deal with Highmark.

Mirror Staff Writer William Kibler is at 949-7038.