The Herald, Sharon, Pa.

Local News

June 14, 2013

Battle heats up again

Hospital board: No more deals

WESTERN PENNSYLVANIA — UPMC and Highmark, the giants of health care in western Pennsylvania, are fierce competitors.

Need proof?

On Wednesday UPMC’s board unanimously passed a resolution stating it can’t enter into a contract with Highmark.

UPMC’s action affects Mercer County, where the hospital system operates UPMC Horizon in Greenville and Farrell. While affecting those two local hospitals, the action concentrates on southwestern Pennsylvania, Susan Manco, a UPMC spokeswoman said Thursday.

UPMC’s grudge match with Highmark came to a head a couple years ago when the health insurer announced it was buying financially ailing West Penn Allegheny Health System in Pittsburgh. The renamed Allegheny Health Network is now in direct competition with UPMC for health care dollars.

Last July, the two health titans reached a ceasefire of sorts, which had been brokered by the state. Under that agreement, UPMC agreed to provide customers of Highmark insurance with “in-network” access to all UPMC doctors and hospitals through 2014.

A copy of this week’s resolution, obtained by The Herald, states that UPMC will not “... enter into any extension of the existing commercial contracts, or any new commercial contracts, providing Highmark with in-network access to any current UPMC hospitals or physicians in Southwestern Pennsylvania beyond Children’s Hospital of Pittsburgh of UPMC, Western Psychiatric Institute and Clinic, UPMC Northwest, UPMC Bedford Memorial and certain other services (including certain unique oncology services) as specified in the mediated agreement of July 1, 2012, and therefore will not do so.’’

The resolution goes on to say UPMC will continue to enter or extend commercially reasonable contracts with health insurers that don’t own or control provider services competing with UPMC hospitals or doctors.

It adds that UPMC managers will immediately attempt to engage Highmark in talks after their existing deal expires at the end of 2014. It calls for:

• Providing all subscriber, patients, physicians and employers with adequate, timely and accurate information on which to base the choices they will have.

• Ensure for the smooth and safe transfer of insurance coverage and patient care.

• Provide for enhanced competition in the market for health insurance and the market for health services.

A Highmark spokesman was not immediately available for comment Thursday evening.

In an open letter to employees, UPMC CEO Jeffrey A. Romoff was more blunt about why UPMC took the action on Wednesday.

“Highmark has stated its intention to limit access to UPMC by diverting 41,000 annual admissions in southwestern Pennsylvania in order to support its newly created and troubled hospital system, Allegheny Health Network,’’ Romoff wrote. “That action could mean the equivalent, for example, of closing UPMC Mercy and UPMC Shadyside and with it the subsequent loss of 11,000 jobs.”

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