Clash Between Hospital, Insurer May Reach Pa. Statehouse

This story is part of a reporting partnership that includes WHYY, and Kaiser Health News.

State lawmakers are signaling a willingness to referee a fight between southwest Pennsylvania’s dominant health insurer and the region’s largest medical system.

Highmark, a Blue Cross Blue Shield affiliate, and UPMC, the University of Pittsburgh Medical Center health system, tried for months to set a new reimbursement rates for doctors’ visits and medical procedures.

Negotiations broke down when Highmark announced plans to buy Pittsburgh’s No. 2 hospital network, the much smaller and struggling West Penn Allegheny Health System.

UPMC officials say that move makes Highmark a competitor.

Last week during a speech at the Pennsylvania Press Club in Harrisburg, Gov. Tom Corbett said he’s “deeply” concerned.

“In my mind, they are both charities and they are both nonprofits and something is getting lost in between,” he said. “And I will work with the Legislature, if necessary, to address this.”

Corbett didn’t say just what outcome he’d like to see.

A health system spokesman says it’s time to educate the public about the end of the UPMC-Highmark contract, but many still hope to push the parties back to the negotiating table.

A lobbyist with the Pennsylvania Insurance Federation said the end of the contract will bring much-needed competition and insurer choice to southwest Pennsylvania.

Some consumer health advocates say it could mean the end of discounts and in-network pricing for thousands of plan holders.

Erin Gill-Ninehouser, an organizer for the Pennsylvania Health Access Network, said consumers are worried they’ll lose access to doctors they know and trust if Highmark buys the smaller health system, and then shifts its discounted pricing to new health providers affiliated with West Penn.

“If the choice is sticking with your doctor but paying 40 percent more because they are out-of-network now, that’s a choice that’s already made for people who are living on tight budgets,” Gill-Ninehouser said.

Lawmakers have proposed a rash of bills in response to the dispute.

One proposal would allow the state insurance commissioner to step in and extend the existing UPMC-Highmark contract.

The quarrel has drawn attention from far beyond the Pittsburgh region because of consumer fears and because both organizations receive tax breaks due to their nonprofit status.