Dive Brief:
- Pittsburgh-based UPMC and Highmark entered into a dispute last year over whether Highmark could deny a higher reimbursement allowed by Medicare for treatment (chemotherapy) at oncology offices the health system designated as hospital outpatient centers.
- An arbitration panel awarded UPMC close to $24 million stating Highmark had reimbursed the health system below contracted rates. The ruling applies to the UPMC's Shadyside hospital, but the decision could extend to all its hospitals, for a total of more than $188 million.
- The arbitration panel said in their ruling Highmark was not allowed to make unilateral adjustments to the fee schedule and the agreement between the two entities "obligating Highmark to increase certain payments to UPMC for the years 2012-2014" was a binding agreement. The panel also stated Highmark's actions constituted "a breach of the covenant of good faith and fair dealing."
Dive Insight:
UPMC wants to sever all ties with Highmark, according to Modern Healthcare, and is waiting on a separate ruling from the Pennsylvania Supreme Court to see if it can terminate its Medicare Advantage contracts with the insurer starting Jan. 1, 2016.
Highmark confirmed the arbitration process was finished, but would not comment about ruling specifics, reported the Pittsburgh Business Times. UPMC also declined to comment.
UPMC CFO Robert DeMichiei told the Pittsburgh Business Times in another article the health system is "moving away from a reliance on Highmark commercial activity" and is focusing on increased activity with Medicaid, Medicare, exchanges, and the national insurers affiliated with the ACA. UPMC reported an operating income of $72 million in the quarter ending Sept. 30 and its operating income was down almost 22% from the same quarter last year.