Arbitration Brings an End to Dispute between UPMC and Highmark Inc.
Saturday, December, 5, 2015
An arbitration panel recently ruled that Highmark Inc. violated a contract with UPMC concerning payments for chemotherapy treatment. As a result of the ruling, the health insurer must pay millions of dollars to the hospital in past claims made by members for cancer treatment.
The panel awarded the UPMC Presbyterian Shadyside Hospital $24 million for the treatment of Highmark patients suffering from cancer. Both side agreed to determine the total amount owed to all UPMC hospitals other than Shadyside, but a regulatory filing listed the potential total as $188 million.
The ruling was unanimous and determined that Highmark was not entitled to make unlimited unilateral adjustments to fee schedules, even though the insurer argued it had the right to do so. The panel called this “… completely lacking in credibility or evidentiary foundation.”
Negotiations between the hospital and insurer began in 2010, but collapsed a year later when Highmark purchased the West Penn Allegheny Health System. A court battle followed and included a case that UPMC appealed to the state Supreme Court concerning their dropping of Highmark’s Medicare Advantage patients. That matter is still pending.
The current ruling promises higher rates for people with group health coverage through Highmark because higher costs of care are eventually passed to patients. Companies that use Highmark, including US Steel and PNC, could see higher costs and surcharges for past cancer care, as a result of the ruling. A spokesperson from Highmark stated their efforts have resulted in lower rates for cancer drugs than had the company not challenged the hospital’s lawsuit.