Dive Brief:
- UPMC, Pittsburgh's largest hospital system, has warned that it will no longer serve Highmark Medicare Advantage policyholders unless Highmark, which is Pennsylvania's largest health payer, increases its oncology payments and drops a lawsuit related to those fees.
- UPMC reported that it notified Highmark of its non-renewal in February.
- Pennsylvania Gov. Tom Wolf called UPMC's decision "unacceptable" and said his office would pursue "all options to reverse this decision, including court action against UPMC."
Dive Insight:
This particular disagreement revolves around UPMC's alleged "markups" for oncology care administered at a hospital outpatient center rather than at a doctor's office.
However, there's far more at issue between the two healthcare companies than oncology fees, including their positions as competitors now that Highmark operates Allegheny Health Network, Pittsburgh's second-largest health system.
Highmark said UPMC's markups were costing the company $200 million per year and stopped paying them, and also filed suit against UPMC arguing that Highmark had overpaid UPMC on oncology fees since 2010.
"Here’s the problem," UPMC spokesman Paul Wood told the Pittsbugh Post-Gazette. "Highmark has not being paying us. It's now up to $143 million," which is an 80% underpayment on Highmark's contractually agreed-upon rate, Wood said.