UPMC is imposing a controversial prepay rule on Highmark-insured Medicare Advantage patients this summer because its leaders have no trust in Highmark to pay bills or honor contracts, UPMC’s attorneys said Wednesday in state Supreme Court.
Starting July 1 — when UPMC and Highmark’s insurance networks are set to officially split — thousands of seniors and people with disabilities will have to arrange for an estimate and prepay, in full, prior to receiving any non-emergency treatment or procedures at most UPMC hospitals. Patients then must seek any possible reimbursement from Highmark or another out-of-network insurer on their own.
The prepay rule spurred confusion and outrage when UPMC announced it on Oct. 1, and Highmark immediately asked UPMC to reconsider.
In a 67-page legal briefing, attorneys for UPMC said the system never would have imposed such a drastic measure had it not been for Highmark’s purported history of failing to pay or underpaying its bills and slashing its reimbursement rates — all while aggressively working to steer Western Pennsylvanians away from UPMC doctors and hospitals.
“UPMC has had to resort to these measures because Highmark continuously has breached its contracts and withheld hundreds of millions of dollars to starve UPMC of reimbursement and gain a competitive advantage,” UPMC’s attorneys wrote.
The filing was in response to a legal challenge against UPMC by state Attorney General Josh Shapiro set to go to trial before the Supreme Court later this month.
To advance his case, Shapiro seeks to convince the state’s highest court to extend the June 30 expiration date of the 2014 state-brokered consent decree between Highmark and UPMC in the name of the public’s interest.
UPMC and Highmark are Downtown Pittsburgh-headquartered nonprofit health systems that each own both provider and insurer arms, boast close to $6 billion in net assets and are investing billions of dollars as they vie for market domination across the state.
In a statement Wednesday to the Tribune-Review, Highmark dismissed many of UPMC’s latest legal claims as false.
Highmark has won praise for being “among the best, most reliable payors in the region,” Highmark spokeswoman Lynn Seay said.
Highmark supports Shapiro’s broader effort to “ensure that all charitable, nonprofit hospitals will contract with all health insurers interested in doing business with them,” Seay said.
Among other demands, Shapiro asked in a Feb. 7 legal petition that UPMC hospitals and doctors accept Highmark patients and patients from any willing insurers “in perpetuity” and drop the out-of-network prepay rule.
Highmark contends that it’s UPMC, not Highmark, that is unnecessarily pitting patients in the middle of a corporate feud. Highmark and some health marketplace experts have described the prepay rule as unprecedented nationally in terms of being imposed on Medicare-eligible patients.
But UPMC says the rule is permissible within regulations governed by the Centers for Medicare & Medicaid Services, and further argues that Shapiro has no right to supersede plans that already have been approved by federal regulators.
In Wednesday’s filing, UPMC described the prepay rule as “borne of Highmark’s stubborn insistence on sending any payments for such care to its subscribers rather than to UPMC.”
UPMC also accused Shapiro of political grandstanding and “scare tactics” and insisted that the June 30 expiration of the consent decree “does not now loom as some sort of impending catastrophe.” UPMC said “the calamity that (the Office of Attorney General) predicts is pure fiction” and relies on “the same speculative, misleading arguments that this court rejected last year.”
Shapiro now has less than 60 days before the consent decree expires — and efforts to use it as a vehicle to force changes on UPMC are rendered effectively moot.
The state Supreme Court is set to hear arguments from both sides during a May 16 hearing in Harrisburg.
