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PA Files Suit in UPMC-Highmark Medicare Fight

The state of Pennsylvania has filed a motion in Commonwealth Court that would force UPMC and Highmark to enter into arbitration to settle a dispute that could force some 180,000 Medicare Advantage recipients to look for new doctors or new coverage options.

The filing from the Wolf administration and the Office of the Attorney General comes just weeks after UPMC announced that it would no longer offer in-network rates for Highmark Medicare Advantage customers and that it would terminate its contract with UPMC because it believes Highmark is seriously behind on its payments to the hospital system for cancer care. Highmark believes it was over-charged.

"I will not allow our most vulnerable citizens, especially seniors, to be used as pawns in the dispute between UPMC and Highmark," Gov. Tom Wolf said in a written statement following the court filing. "UPMC's decision to cancel Medicare Advantage for over 180,000 seniors was the final straw …  After reviewing all options with the Office of Attorney General, the Commonwealth has decided to pursue this matter in court to protect seniors."

According to the govenor's spokesman, Jeff Sheridan, the motion is two-fold. One portion is aimed at protecting seniors with Medicare Advantage, while the other calls on UPMC and Highmark "to settle all outstanding disputes, to end the confusion for consumers," Sheridan said.

"Consumers, including seniors and people with cancer, have had enough, and the games between UPMC and Highmark must end,” added Wolf.

The two nonprofit giants are working under a state-monitored and imposed consent decree that is governing the termination of relations between UPMC and Highmark. The decree was entered into in 2014.

UPMC responded to this story with the following written statement:

The Attorney General earlier today alleged that both UPMC and Highmark violated the Consent Decree. While UPMC agrees with the allegation as to Highmark, a careful review clearly demonstrates there’s no substantive or legal basis for any of the Commonwealth’s misinformed claims against UPMC. Nor does recommending arbitration solve the issues that divide Highmark and UPMC. As the Commonwealth has alleged, the Consent Decree required Highmark to arbitrate, on an expedited basis, its assertion that it can change the rates it is obligated to pay UPMC unilaterally. Highmark then actively subverted and ultimately halted the mandated arbitration with litigation that the Commonwealth maintains “undermines” protections for seniors. UPMC filed formal complaints with the Commonwealth twice last fall stating Highmark’s unilateral violations of the current Medicare Advantage agreements, the 2012 Mediated Agreement and the 2014 Consent Decree would force UPMC to terminate the Medicare Advantage agreements with Highmark for 2016. These warnings were ignored by the Commonwealth, and it missed the opportunity to enforce the arbitration clause and get this issue resolved by the Consent Decree’s December 31, 2014 deadline and the April 1, 2015 deadline for Medicare Advantage contracting renewals. The termination of UPMC Medicare Advantage agreements with Highmark will not harm seniors. They can expect to enjoy the benefits of more choice and competition and, likely, lower insurance premiums if they choose to stay in a Medicare Advantage plan. Seniors always have the option of opting out of Medicare Advantage and, instead, can enroll in “traditional” Medicare fee-for-service.

Editor's note: This story has been updated to include comment from UPMC.