UPMC Will Accept Highmark Patients, Per New Contract

By: Margaret Potter, Blog Editor

The contentious relationship between the two Pennsylvania healthcare giants, UPMC and Highmark, is a story well known to all Western Pennsylvanians for the past several years. In an unlikely turn of events, the two health insurance companies were able to come to common ground and enter into an agreement on June 24^th that will protect thousands of Pennsylvanian patients’ access to care in the area.^[1]

Prior to the agreement made in June, the combative relationship between UPMC and Highmark reached its boiling point in 2012 after Highmark purchased Allegheny Health Network for over $2 billion.^[2] Seeing Allegheny Health Network as a substantial competitor to its business, UPMC announced that it would cease accepting patients insured by Highmark at its facilities and by its health care providers.^[3]

In 2014, the Commonwealth of Pennsylvania chose to intervene by entering into the consent decree between UPMC and Highmark due to their statuses as public non-profit charities.^[4] As non-profit charities, UPMC and Highmark are able to receive substantial tax exempt donations as well as not being required to pay taxes.^[5] For example, as a non-profit charity UPMC received $40 million in property tax benefits in 2018 and received $1.27 billion in tax exempt donations from 2005-2017.^[6]

The Commonwealth, UPMC, and Highmark brokered this consent decree to ensure that their patients would have access to care.^[7] The two healthcare providers were able to reach an agreement without going to court.^[8] However, either UPMC or Highmark as a party to the consent decree can request the decree to be modified at any time.^[9] Highmark would agree to changing the consent decree in order to sustain a relationship with UPMC, yet UPMC refused to agree to these changes.^[10]

According to Attorney General Josh Shapiro, it is the “Attorney General’s responsibility to ensure that institutions who are given public support live up to their mission, comply with the law and act in the public interest”.^[11] As a public non-profit charity, Shapiro found that UPMC violated the consent decree and failed to fulfill its charitable duty to patients by acting contradictorily to its charitable mission.^[12] Shapiro argues that by requiring out-of-network patients to pay charges upfront prior to treatment, refusing to enter into contracts with employers who also have contracts with competing healthcare providers, and receiving unjust enrichment through surplus reimbursements by self-insured employers, UPMC has acted in direct contradiction with its charitable mission.^[13] By refusing to renew the consent decree, UPMC would have effectively caused thousands of patients insured by Highmark to lose access to their doctors and treatment facilities, which Shapiro perceives as “harming patients by creating barriers to treatment and jeopardizing the public interest”.^[14]

On June 14^, 2018, the Commonwealth Court ruled that the state could not adjust the consent agreement between UPMC and Highmark.^[15] Following this ruling, Shapiro began vigorously pursuing negotiations with UPMC and Highmark with the purpose of reaching an agreement.^[16]

With the agreement set to expire on June 23^rd, the possibility of the two healthcare giants reaching an agreement to ensure the protection of all subscribers seemed bleak.^[17] Yet, on June 24, the unforeseen happened when UPMC and Highmark announced a ten-year contract through which UPMC will allow Highmark patients to receive care at UPMC facilities.^[18]

“Going forward, and that the two healthcare giants will no longer be adversaries.” Shapiro opined following the announcement.^[19] “Rather, they will act together to serve the public”, Shapiro continued.^[20]

In further admiration of the two corporations, Mayor Bill Peduto said, “This agreement allows us to enter a new chapter, and create a potential for new partnerships, where we can work together to create a global center of medicine that will be unparalleled in a region our size.”^[21]

The agreement reached by UPMC and Highmark, the longest deal UPMC has ever made with another health insurance provider, will take immediate effect to ensure its insured patients do not experience disruption in access to care.^[22]

Shapiro credits Western Pennsylvanians for compelling the two healthcare giants to enter this deal.^[23] “Thanks to the patients who told their stories about what they stood to lose, Western Pennsylvanians now have their access to a fair healthcare system secured for the next decade,” Shapiro explained.^[24]

Due to the agreement, the Attorney General’s lawsuit against UPMC has been withdrawn.^[25] Whether UPMC and Highmark maintain their agreement after the ten-year contract expires is unclear, but a new era of secured access to healthcare in Pennsylvania is ensured for the next ten years.

[1] https://www.wtae.com/article/upmc-highmark-new-10-year-deal/28163536

[2] Id.

[3] https://www.attorneygeneral.gov/upmc/

[4] Id.

[5] Id.

[6] Id.

[7] Id.

[8] Id.

[9] Id.

[10] Id.

[11] Id.

[12] Id.