UPMC drops plan to require Medicare prepayment

Months after announcing the policy, UPMC has reversed course and now says it will not require Highmark Medicare Advantage members to pay in advance for services after consent decrees linking the two organizations expire July 1.

In a release posted on its website, spokesman Paul Wood said UPMC notified the Pennsylvania Insurance Department on Wednesday of the change regarding prepayment.

He also said UPMC would accept direct payment from Highmark for out-of-network emergency care at the same rate that UPMC Health Plan currently pays Highmark’s Allegheny Health Network hospitals.

“As the consent decrees near their end on June 30, our intent is to ensure that Highmark members can receive emergency and other care that they need without being caught in the middle of billing issues created by their insurer,” Mr. Wood said.

The Pittsburgh Post-Gazette had reported Tuesday that federal officials might be taking a closer look at UPMC’s planned prepayment policy. The policy would have required Highmark Medicare Advantage members to pay the full estimated cost of

services before receiving care at UPMC facilities.

The policy, first revealed in October, had become a flashpoint in the ongoing dispute between the two Pittsburgh health giants who are currently scheduled to sever their contractual ties at the end of the month.

In April, U.S. Sen. Bob Casey, D-Pa., had asked U.S. Health and Human Services Secretary Alex Azar to intervene, noting the financial hardship the policy would bring for seniors and those with disabilities.

On Tuesday, a spokesman for Mr. Casey said the senator had recently spoken to Mr. Azar and the secretary had “pledged to personally look into steps HHS can take in this matter and specifically at the issue of prepayment.”

A spokeswoman for Mr. Azar’s office on Tuesday said HHS does not comment on the specifics of private conversations between the secretary and members of Congress.

She did add, however, that “the secretary and the administration take seriously the need to protect access to quality health care for seniors in Medicare and will always look to work with Congress on advancing that mission.”

Following UPMC’s announcement Wednesday, Mr. Casey said in a statement, “I have advocated for an end to UPMC’s prepayment policy since it was first announced. The rules of the Medicare program will ensure UPMC is paid for the care it provides and I appreciate UPMC’s decision to prioritize the needs of its patients over profit.

“I have long advocated for a result that would put patients first and I am pleased to hear of this new development. This is the correct decision and I hope UPMC and Highmark will continue to keep the needs of beneficiaries in mind.”

Mr. Wood said key to the change was acknowledgement by Highmark that Medicare laws obligated the insurer to pay out-of-network Medicare Advantage providers directly, thus avoiding reimbursement disputes that have occurred in the past.

In 2014, for example, Highmark announced it would stop paying what it considered markups on UPMC claims for cancer treatment provided in a physician’s office but billed as hospital outpatient care.

The following year, an arbitration panel ruled that Highmark had violated its contract with UPMC by withholding the payments, telling the insurer to make those payments, which UPMC estimated could exceed $188 million.

At another point, Highmark temporarily withheld payment on some 30,000 medical claims, saying it did not have enough information to determine if the care was innetwork or out-of-network. After state officials intervened, Highmark agreed to make the payments.

Mr. Wood said UPMC would have never imposed the prepayment requirement in the first place if Highmark “not had such a poor history of failing to pay or underpaying its bills and unilaterally slashing its reimbursement rates.”

Highmark spokesman Aaron Billger, meanwhile, said, “We have always been focused on doing what’s right for our customers and patients. We are glad UPMC is now in agreement with us. We have long said that UPMC’s actions were unnecessary and unprecedented. It’s a shame they promoted this in the first place.”

While the demise of the UPMC-Highmark relationship began nearly a decade ago, the prepayment issue arose only last fall.

On Oct. 1, Highmark had unveiled Medicare Advantage plans that featured an enhanced out-of-network benefit for Freedom Blue and Security Blue members so they could be treated at UPMC hospitals even after the June 30 consent decrees expiration at no additional out-of-pocket cost.

Within hours, an internal UPMC memo surfaced that told physicians and staff that Highmark Medicare Advantage members would be expected to pay an estimated cost of services at UPMC after June 30. The memo specifically stated that neither partial payments nor payment plans would be acceptable.

The prospect of seniors having to shell out thousands of dollars just to schedule an appointment at UPMC became a flashpoint issue that soon attracted the attention of both state and federal officials.

It also factored into seniors’ decisions on which Medicare Advantage plan to enroll in this year. When the Centers for Medicare and Medicaid Services authorized a three-month, open enrollment period beginning in January, nearly 2,000 Highmark Medicare Advantage members in Allegheny County switched plans.

The majority of those switching chose national insurers such as Aetna, which provided access to both UPMC and Highmark’s Allegheny Health Network.

Although it was the most contentious issue recently, UPMC’s withdrawal of the prepayment policy does not change the larger dispute over whether Attorney General Josh Shapiro can force UPMC to agree to an extension of the consent decrees beyond this month.

Arguments on that question are scheduled to be heard next week in Commonwealth Court.