June 16--The future of a UPMC cancer center at Jefferson Regional Medical Center is up in the air since Highmark Inc. announced this week that it is forming a partnership with the Jefferson Hills hospital.
Highmark, the state's largest health insurance company, on Tuesday said the 373-bed Jefferson medical center would become the southern hub of a $1 billion integrated health system it is creating to compete with UPMC. Highmark plans to give Jefferson Regional$75 million, build a new emergency department at the hospital, expand its services and guarantee about $200 million of the system's debt, pension and other long-term obligations.
Highmark's network would also include West Penn Allegheny Health System, which the insurer has agreed to buy for $475 million. That deal is awaiting approval from the state Insurance Department.
UPMC, the region's dominant hospital system, plans to cut ties with Highmark after 2014. That could mean the end of the cancer center that has been jointly operated by UPMC and Jefferson Regional since 2005. Also in question is a partnership between the two organizations to develop a digital network for sharing patients' electronic health records.
"Basically we need to sit down with UPMC and talk to them," said Mary Beth Lowery, a Jefferson Regional spokeswoman. "There's nothing really more to say at this point."
UPMC spokesman Paul Wood declined to comment. Both he and Lowery declined to say how long the current agreement to operate the cancer center lasts or how many patients receive treatment at the center.
Highmark spokesman Michael Weinstein declined to comment on the future of the center, noting that the deal between Highmark and Jefferson Regional has not been finalized and requires approval from the state Attorney General's Office and the Allegheny County Orphan's Court.
It's possible that some or all of UPMC's network of more than 30 cancer centers around Western Pennsylvania could be covered under an agreement being hammered out by officials from the two organizations. A major component of the proposed agreement, announced May 2, calls for a new reimbursement contract that gives Highmark members in-network access to UPMC until the end of 2014. Their contract expires June 30, 2013.
Negotiations are on track to finalize the deal by the end of this month, officials said.
The May 2 announcement also said Highmark and UPMC would negotiate rates and terms for Highmark members to have in-network access starting in 2015 for "certain oncological services."
Both Wood and Weinstein declined to say if "certain oncological services" includes the cancer center at Jefferson Regional.
In August, UPMC said it was creating a regional health information exchange, a network for sharing patients' electronic health records. The $4 million network is being set up with eight local hospitals, including Jefferson Regional, and is expected to begin operating next year.
Highmark is setting up its own exchange network that will stretch across the state, and Jefferson Regional has signed on as a member.
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