Feds may re-examine UPMC’s policy of pre-paying
The pending HighmarkUPMC split may be drawing renewed scrutiny from top federal officials.
Sen. Bob Casey and U.S. Health and Human Services Secretary Alex Azar recently spoke regarding Pittsburgh health giant UPMC’s plan to require advance payment from Highmark Medicare Advantage members once the five-year Highmark-UPMC consent decrees expire June 30, a spokesman for Mr. Casey told the PostGazette on Monday.
“Secretary Azar pledged to personally look into steps HHS can take in this matter and specifically at the issue of pre-payment,” wrote spokesman Andres Anzola in an email.
In a letter to Mr. Azar sent in late April, Mr. Casey had asked the HHS secretary to block a UPMC plan to require prepayment for non-emergency care administered to Highmark members, saying “requiring seniors and people with disabilities to pay thousands of dollars in advance is unacceptable for a nonprofit health system.”
That correspondence led to what Mr. Anzola described as a brief, but productive, phone conversation between the two officials 11 days ago.
“Secretary Azar appeared to take this issue seriously,” Mr. Anzola said. “Sen. Casey is hopeful that HHS will be able to provide relief to Pennsylvanians.”
Asked to confirm the phone conversation and Mr. Anzola’s description of it on Tuesday, an HHS spokeswoman responded with the following statement:
“While we do not comment on the specifics of private conversations between the secretary and members of Congress, Secretary Azar is in regular contact with members regarding issues that affect the communities they represent. The secretary and the administration take seriously the need to protect access to quality healthcare for seniors on Medicare and will always look to work with Congress on advancing that mission.”
UPMC spokesman Paul Wood said Tuesday that the health care provider has not been contacted by Mr. Azar’s office.
The Department of Healthand Human Services
oversees the Centers for Medicare and Medicaid Services (CMS), which administers Medicare programs.
During a visit to Pittsburgh by two top federal health officials last fall on a different matter, Mr. Azar said he was aware of the UPMC-Highmark dispute, and Paul Mango, chief principal deputy administrator at CMS, said they were both “looking into it” while describing the situation as “very novel.”
Since then, any federal review or inquiry has been all but invisible.
The public spotlight has been on state Attorney General Josh Shapiro’s efforts to force UPMC into extending consent decrees signed in 2014 that provide in-network access to seniors and those with disabilities who hold Highmark insurance plans. Highmark officials have already agreed to Mr. Shapiro’s proposal.
The two federal agencies would seem to hold a strong interest in the UPMC-Highmark breakup, as the consent decrees’ expiration June 30 will impact access to UPMC hospitals and physicians for thousands of Highmark Medicare Advantage members in the Pittsburgh and Erie markets.
But federal officials have remained largely silent, at least publicly.
“I think this is just uncharted territory for CMS,” said Harold Miller, president and CEO of the Pittsburgh-based Center for Healthcare Quality and Payment Reform. “I doubt they’ve ever seen anything like this before, or if they have, the person who saw it isn’t there anymore so they have no institutional memory to draw on.”
Gerard Anderson, a professor of health policy and management at Johns Hopkins University in Baltimore, helped create the CMS prospective payment system when he was with the HHS secretary’s office in 1983.
Hospitals and out-of-network insurers commonly work together, he said. Typically, the patient gets the care and the hospital or health system will bill the insurer, expecting payment in 30-60 days.
The difference here is the advance payment requirement. UPMC has said the payment required would be the estimated cost for the service based on the amount set by CMS.
In an internal memo to UPMC physicians and staff last fall, Chief Medical and Scientific Officer Steve Shapiro wrote that UPMC will not accept partial payment, nor will it arrange a payment plan. “It will be due in full and in advance of services.”
Mr. Miller, a widely recognized expert on health care payment models, offered one example of what a pre-payment requirement would cost patients.
For an uncomplicated hip or knee replacement at UPMC Magee-Womens Hospital in Oakland, he said the CMS-allowed payment would be $17,085, for which the beneficiary could be responsible for a $1,364 deductible. Meanwhile, CMS would pay the surgeon $1,380, with the patient owing 20% of that amount, or $276.
Historically, CMS has not typically intervened regarding access as long as a suitable alternative, such as Allegheny Health Network, is available.
As stories from individual Highmark patients have surfaced, such as patients who see specialists in both networks or who have serious medical conditions that have been treated for years at UPMC, it has become clear that changing networks is more complicated and anxiety -inducing than finding a new dry cleaner or auto repair shop.
That could be the key here, said Mr. Anderson, a professor of health policy and management and professor of international health at Johns Hopkins.
“I would say if the beneficiary is not harmed, then the [UPMC-Highmark] business relationship can go forward. On the other hand, if the beneficiary cannot get care — either innetwork or out-of-network — because of the upfront payment, then it’s a serious problem,” he said.
“It’s very squishy. There’s not a clear answer.”