In a deal worked out in “intense negotiations,” UPMC and Highmark have inked an agreement that will give many Highmark insurance members in-network access to UPMC doctors for the next 10 years, state Attorney General Josh Shapiro announced Monday at a press conference in the Strip District.
The breakthrough agreement goes into effect July 1, giving many Highmark members access to UPMC doctors and hospitals for years to come.
"Patients will not face any disruption in care," Mr. Shapiro said. "I could not be more grateful to these two companies."
The agreement came just six days before thousands of Highmark members in Pittsburgh and Erie would’ve lost access to UPMC doctors June 30.
Mr. Shapiro called it a new foundation to address problems and challenges as they emerge. He said the two Pittsburgh health care giants pledged to act as allies. “They’re doing right by the people of Pennsylvania,” said Mr. Shapiro, thanking both UPMC and Highmark.
"The deal is done. Both parties have agreed," he said. "This is a decadelong of consistency."
Highmark President and CEO David Holmberg described the attorney general’s office as a broker in the talks with UPMC President and CEO Jeffrey Romoff. Among the benefits of the agreement will be certainty in the rates that UPMC charges to treat Highmark members.
“It’s a great victory,” Mr. Holmberg said.
Mr. Shapiro described the agreement as “global,” but not everyone with a Highmark insurance card will have in-network access to all UPMC facilities.
“It depends on the product you have,” said Highmark Inc. President Deborah Rice-Johnson. For example, some UPMC hospitals will be out-of-network for people with Community Blue plans.
UPMC and Highmark officials did not attend the news conference.
Eying the end of contractual relations with UPMC, Highmark in 2017 embarked on an ambitious $1 billion facility building plan, which included a 160-bed hospital in Pine, four mini-hospitals and cancer treatment centers throughout the region. Mr. Holmberg said Monday those efforts were complementary, rather than duplicative of existing health care facilities, giving consumers a choice of providers.
UPMC disagreed in a recent statement that was posted to its website.
Southwestern Pennsylvania has a “significant surplus of hospital beds, the product of a stable or declining population combined with advances in medical care that have reduced the need for acute admissions,” UPMC wrote in what it described as a background statement. “Any effort to increase patient admissions at one hospital will succeed only at the expense of other hospitals.”
Mr. Holmberg declined to say how often or where he met with Mr. Romoff before the breakthrough agreement.
The bad blood between Highmark and UPMC dates back years, which left thousands of Highmark insurance members uncertain about whether or not they could continue seeing UPMC doctors when state-brokered consent decrees each signed expired June 30. Commonwealth Court Judge Robert Simpson ruled June 14 that consent decrees between the two Pittsburgh health care giants expired at the end of this month — a setback for the attorney general who sought to extend them indefinitely.
Before that decision, Mr. Shapiro said Monday that UPMC had reached out and that he, Mr. Romoff and Mr. Holmberg met last week. He called the dialogue between the parties honest and tough.
“A deal was worked out,” he said. “All of the language has been agreed to. It has been signed," Mr. Shapiro said.
The new contract is between Highmark and UPMC; state regulators are not part of it.
“This is a really, really big deal,” said Pennsylvania Gov. Tom Wolf at Monday’s news conference.
He thanked the two health care organizations for coming to an agreement without the government forcing something on them. “It’s a great thing for the people of Western Pennsylvania,” he said.
As things stood, 11 UPMC hospitals, and affiliated doctors, in the Pittsburgh area and in Erie would have been out of network after June 30 for people with Blue Cross Blue Shield insurance cards.
Mr. Shapiro said he would withdraw his lawsuit as the result of the agreement, but continue “due diligence” in making sure nonprofits met their charitable mission.
The attorney general had filed a four-count civil lawsuit against UPMC in February, claiming that the health care giant had strayed from its charitable mission by excluding Highmark members from its network of doctors and most hospitals.
In addition to seeking to extend the consent decrees indefinitely, the attorney general's lawsuit claimed that UPMC violated the state Charities Act by denying those with Highmark and other health insurance coverage access to its doctors and UPMC's board had breached its responsibilities and defeated the "very purposes of the corporate charter under which UPMC was created."
Finally, the lawsuit alleged UPMC violated the Consumer Protection Law by engaging in unfair competition and creating public confusion about covered services.
In court filings, UPMC denied the claims.
Commonwealth Court stayed action on the pending three counts, while the courts addressed the end date issue.
The agreement means that UPMC is done with a costly distraction at a time of dramatic growth for the system, the biggest employer in Pennsylvania.
“They’re still going to be competitors,” said Mr. Wolf, but the two health care systems will also be accessible to patients.
He noted that both organizations would now be able to make investments and decisions for the future, knowing what their relationship will be for the next decade.
Two Democratic state legislators from Western Pennsylvania have introduced bills that would have forced entities like Highmark and UPMC to work together, which included binding arbitration if they could not come to an agreement on their own.
On Monday, shortly after Mr. Shapiro's announcement, one of them, Senate Minority Leader Jay Costa, D-Forest Hills, promised to continue that work. The efforts have met some resistance in the Republican-controlled Legislature.
"My colleague [State Rep.] Dan Frankel and I will continue to work to bring legislative solutions so that we're not faced with this 10 years from now, but also as it relates to other parts of the commonwealth," Mr. Costa said in a video posted to his Twitter account.
He added later: "We're going to continue to fight, but at the end of the day, this is tremendous, tremendous news for Allegheny County and southwestern PA, where these two entities are coming together."
Kris B. Mamula: kmamula@post-gazette.com or 412-263-1699. Liz Navratil: lnavratil@post-gazette.com or on Twitter @liznavratil.
Updated at 6:50 p.m. June 24, 2019
First Published: June 24, 2019, 3:41 p.m.
Updated: June 24, 2019, 4:09 p.m.
