Highmark health insurance subscribers won't be able to use UPMC East at in-network rates when the hospital opens in Monroeville this July.
The health insurer turned down a one-year contract offer from UPMC on Tuesday, saying the proposed deal was too short.
"The community feels it's unfair to encourage Highmark members to use a new hospital for such a short period of time, and then take away that privilege over a longer period of time," said Highmark spokesman Michael Weinstein. "We don't think that's fair to doctors. We don't think that's fair to our members. It doesn't make sense, but that's what UPMC is asking for."
On the other hand, UPMC spokesman Paul Wood characterized Highmark's refusal of the offer as a way to shunt customers into using the nearby Forbes Regional Hospital instead. Forbes is operated by West Penn Allegheny Health System, which is being bought by Highmark.
"Out in the eastern suburbs, once UPMC East opens, we know if subscribers are given a free choice, everybody's going to choose UPMC East. Nobody's going to choose Forbes," said Wood. "That's something Highmark absolutely cannot allow to happen."
The lack of a contract means Highmark subscribers can't use UPMC East without paying exorbitant costs, including Medicare and Medicaid beneficiaries. UPMC's Wood said that violates an agreement made by the two companies this winter.
"This is a very public breaching, or very public reneging of an agreement to keep Medicare out of this commercial insurance dispute," said Wood. "UPMC had offered to Highmark Medicare contracts that were identical to all the other Medicare contracts that were in place for all the other UPMC facilities throughout the region, but Highmark declined."
The agreement was published in local newspapers in December.
Highmark's Weinstein said his company's position is to support local healthcare competition.
"We think the ideal solution is to have a long-term contract with UPMC so we can work with them and have their hospitals in our network, and at the same time, to have a fair competition in the marketplace. UPMC Health Plan should have contracts with the West Penn Allegheny Health System hospitals," said Weinstein.
Contracts between Highmark and UPMC are set to expire on June 30, 2013.
