UPMC, Highmark announce contract extension to 2015

Associated Press
Gov. Tom Corbett announces an agreement between the University of Pittsburgh Medical Center and insurer Highmark Inc. to extend in-network coverage for about 2.5 million western Pennsylvania health insurance customers during a Capitol news conference, Wednesday, May 2, 2012 in Harrisburg, Pa. The University of Pittsburgh Medical Center and Highmark Inc. have agreed to an 18-month extension on a regional health care contract that will keep the medical center's hospitals and doctors in Highmark's network through the end of 2014, Gov. Tom Corbett said Wednesday. (AP Photo/Marc Levy)
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Gov. Tom Corbett announces an agreement between the University of Pittsburgh Medical Center and insurer Highmark Inc. to extend in-network coverage for about 2.5 million western Pennsylvania health insurance customers during a Capitol news conference, Wednesday, May 2, 2012 in Harrisburg, Pa. The University of Pittsburgh Medical Center and Highmark Inc. have agreed to an 18-month extension on a regional health care contract that will keep the medical center's hospitals and doctors in Highmark's network through the end of 2014, Gov. Tom Corbett said Wednesday. (AP Photo/Marc Levy)

HARRISBURG, Pa. (AP) — The University of Pittsburgh Medical Center and Highmark Inc. have agreed to an 18-month extension on a regional health care contract that will keep the medical center's hospitals and doctors in Highmark's network through the end of 2014, Gov. Tom Corbett said Wednesday.

The agreement was reached Tuesday evening, a Corbett aide said, although the governor said he did not have complete details about the pact, and a Highmark spokesman declined to give additional details beyond a joint statement the groups issued through Corbett's office.

The governor said he hadn't sat at the negotiating table, but had applied pressure to resolve a dispute that was creating uncertainty for about 2.5 million Highmark insurance customers in western Pennsylvania.

"I encouraged them that they need to address this issue, they need to get it done," Corbett told a Capitol news conference. "With the assistance of the Legislature backing me up, (I told them) that if they did not get this done, we would get it done for them and I don't think anybody wants to see government get into what is really a business relationship and I think they took that to heart and were able to resolve this."

As part of the deal, Highmark agreed to stop pressing for legislation to force the two into binding arbitration. Highmark has said that UPMC was seeking a 40 percent increase in reimbursement payments.

On Wednesday, Highmark spokesman Michael Weinstein would not say whether higher reimbursements are part of the pact. But a person familiar with the agreement said that, as part of it, Highmark will pay higher reimbursement rates similar to those paid by commercial insurers Aetna, Cigna and United. The person spoke to The Associated Press on condition of anonymity because they did not want to be named citing contract details normally kept confidential.

Corbett said he had asked David F. Simon, executive vice president of Jefferson Health System in the Philadelphia area, to help mediate.

The dispute over in-network coverage disrupted negotiations last June when Highmark, Pennsylvania's largest health insurer, announced a $475 million takeover of the financially troubled six-hospital West Penn Allegheny Health System.

UPMC had said that made Highmark a direct competitor to its system of about 20 hospitals and 3,000 physicians. Under pressure from state lawmakers and the Corbett administration, the groups in December had agreed to a one-year contract extension that expires June 30, 2013.

Highmark and UPMC have an agreement in principle to ensure in-network access beyond 2014 to specialty UPMC facilities, such as Western Psychiatric Institute, certain oncological services and rural community hospitals, but must work out the final details.

Highmark customers are already guaranteed in-network access to UPMC Children's Hospital through June 30, 2022. UPMC also will provide in-network coverage and services for people enrolled in the Children's Health Insurance Program (CHIP), Special Care and a state plan for people with pre-existing conditions.

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