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​UPMC’s Medicare Advantage Provider Contracts with Highmark Will Not Be Extended for 2016

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Paul Wood
Vice President & Chief Communications Officer, Public Relations
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4/8/2015

PITTSBURGH, April 8, 2015 – UPMC is deeply committed to providing its world-class medical care to all seniors, including those seniors participating in the Medicare Advantage program. Indeed, UPMC joined the Commonwealth of Pennsylvania last year in trying to prevent Highmark from excluding UPMC from its Community Blue Medicare HMO offerings.

Nearly a year ago, however, Highmark stopped paying UPMC the rates specified in those contracts for that world-class care—including treatment for cancer at the renowned Hillman Cancer Center—and claimed that it has the right to reduce rates whenever and however it wishes. Although UPMC gave Highmark more than sufficient opportunity to take the required corrective actions, it has refused. As a result of Highmark’s breach of its UPMC contracts, and in keeping with UPMC’s right to end the contracts at the end of each calendar year with or without cause, UPMC has provided Highmark with notices of non-renewal of the current Medicare Advantage contracts effective January 1, 2016. No responsible organization could enter into—let alone extend—such illusory and one-sided contracts.

The Consent Decrees entered with the Commonwealth on July 1, 2014, explicitly contemplated this possibility, giving UPMC the right to withdraw from its Medicare Advantage arrangements with Highmark if Highmark “should take the position that it has the authority to revise the rates payable under those arrangements unilaterally and materially.” Several months ago UPMC notified the Commonwealth that Highmark had triggered UPMC’s right to withdraw from those arrangements by repeatedly asserting that argument and by continuing to underpay UPMC for its medical services. UPMC has elected to make this withdrawal effective January 1, 2016, so as not to interrupt services for the current program year.

This action has no impact for the rest of 2015 on those seniors who are currently Highmark Medicare Advantage members. Other than Highmark Community Blue Medicare HMO members, who have never had in-network access to UPMC’s non-emergent services, all other Highmark Medicare Advantage members can continue to use all UPMC physicians and facilities on an in-network basis through December 31, 2015.

This October, Medicare Advantage open enrollment will begin for 2016. UPMC believes that, during that open enrollment, several options will be available to Medicare Advantage subscribers who want to have in-network access to UPMC. Today, the majority of seniors in western Pennsylvania already subscribe to Medicare Advantage programs with these insurers.