Feds: No say in UPMC-Highmark dispute

While state officials work to defuse the latest standoff between Highmark and UPMC, federal officials are now keeping tabs on the fray but say they have no jurisdiction over it.

UPMC plans to lock Highmark’s Medicare Advantage customers out of the UPMC hospital network starting Jan. 1, unless Highmark makes good on the $143 million and counting that UPMC says it is owed in unpaid chemotherapy reimbursements.

That plan elicited responses from Congress and from the federal agency that oversees the Medicare program.

“I think UPMC made a bad decision here,” said Rep. Mike Doyle, D-Forest Hills. “You don’t use 180,000 seniors as leverage to get something else you want.” Mr. Doyle, however, said Congress has little role in resolving the dispute.

The U.S. Centers for Medicare & Medicaid Services, overseer of the Medicare program, said it, too, is powerless to intervene in the dispute. “By statute, CMS cannot get involved in negotiations between providers and Medicare Advantage organizations,” a CMS official said in a statement.

Other Pennsylvanians in Congress responded when asked for comment on the dispute.

A spokeswoman for Rep. Keith Rothfus, R-Sewickley, said “seniors across Western Pennsylvania need to know their coverage for 2015 will not be disrupted.”

And Sen. Bob Casey’s office said the Democratic senator had “met with representatives to emphasize the need to protect beneficiaries.”

UPMC lobbyists met with Mr. Doyle’s staff March 25 and with Mr. Doyle earlier in the month. In an interview Thursday, Mr. Doyle said the UPMC representatives sought to make the case that Highmark was the party responsible for violating the 2014 consent decree that governs the separation of the two Pittsburgh health giants now that Highmark’s under-65 customers no longer have full, in-network access to most of UPMC’s Allegheny County hospitals.

UPMC sent Highmark a notice of nonrenewal in February regarding Medicare Advantage access. The intervening weeks have been spent in discussion with state officials and lobbying in Washington.

Highmark says UPMC changed its oncology billing practices starting in 2010, coding outpatient chemotherapy treatments as inpatient hospital treatments. Because Medicare rules allow hospitals to collect more if the treatment is done in an inpatient setting, UPMC was able to receive hundreds of millions in extra cash from Highmark.

That’s why, in April 2014, Highmark stopped paying those “markups.” That payment dispute was addressed, however, in the June 2014 divorce agreement between Highmark and UPMC, stipulating that if the two parties couldn’t come to an agreement, the state would mediate the issue.

The consent decree, which is supposed to remain in effect through mid2019, says: “UPMC shall treat all Medicare-participating consumers as in-network. ... Highmark acknowledges that UPMC reserves the right to withdraw from these arrangements if Highmark should [revise] the rates and fees payable under those arrangements unilaterally.”

“The seniors [were] told they weren’t going to be part of this,” Mr. Doyle said. “You can’t pull the rug out from under them.”

Mr. Doyle said he generally agreed with ground staked out by Gov. Tom Wolf, also a Democrat, and several members of southwestern Pennsylvania’s legislative delegation in Harrisburg. On Wednesday, state officials said that UPMC’s gambit was an “unacceptable” breach of trust with the region’s seniors, and a letter was sent to UPMC at the end of March threatening legal action.

Joseph Angelelli, a gerontology and health services professor at Robert Morris University, said that this breakup, should it come to pass, has the potential to be far more disruptive than the split affecting those younger than 65, which took effect at the beginning of this year. That’s because seniors generally see their doctors more often than those under 65.

“It’s a bit of brinkmanship, but there are serious consequences, obviously, should it go forward,” he said.

And those consequences seem to favor UPMC. If Highmark capitulates, UPMC receives its bounty. And if Highmark holds out, UPMC’s insurance arm, UPMC Health Plan, “has an opportunity to go after even more of these Medicare Advantage customers,” Mr. Angelelli said.

Medicare is the federally subsidized health program for those 65 and older, and Medicare Advantage policies are the privately administered versions of the federal plan, sold by companies such as Highmark, UPMC Health Plan and other national insurers.

“The seniors [were] told they weren’t going to be part of this. You can’t pull the rug out from under them.” Rep. Mike Doyle D-Forest Hills