Pennsylvania regulators: Highmark Medicare plan violates consent decree

Oct. 06--The state and UPMC say one of Highmark's brand new Medicare Advantage products runs afoul of the recent consent decree signed by the two health giants, and both are contemplating legal action in order to have the plan nixed by state courts.

The plan in question is a narrow-network "Community Blue" plan, with monthly premiums starting at $0. UPMC's hospitals are not part of the plan's doctor network, nor are Excela Health in Westmoreland County, Butler Health System or Washington Health System. It was introduced last week, during Highmark's media roll-out of its new 2015 plans.

State regulators -- state Insurance Commissioner Michael Consedine, Attorney General Kathleen Kane, and Department of Health Secretary Michael Wolf -- believe the new Highmark Medicare plan violates the consent decree, and sent a letter to Highmark on Friday, saying that they find Highmark's "continued marketing of its [Medicare Advantage plan] to be in violation" of the decree and other laws.

But Highmark says the three state agencies "were all aware that we intended to offer this Medicare Advantage Community Blue product," and didn't raise any objections over the spring and summer, as the decrees and transition plans were being negotiated and written.

"Highmark has decades-long experience working with seniors, and we know they want choice to meet their varying needs and budgets. The burden is on the state to explain to tens of thousands of senior citizens in Western Pennsylvania how prohibiting this no-premium product is in their best interest or promotes fair competition in the marketplace," said David W. Carter, Highmark Health spokesman.

The regulators also sent a letter to UPMC, advising the health network that if it files its emergency court action as contemplated, UPMC will also be in violation of the consent decree, by circumventing the decree's built-in enforcement provisions and taking the matter directly to the courts.

And the regulators had harsh words for both Highmark and UPMC in letters sent out over the weekend: "We are extremely disappointed that both companies appear to have lost sight of the spirit in which you entered the consent decree ... your continued discord has now resulted in us having to take [potential] legal action that will likely only heighten consumer confusion and alarm."

The provision of the June consent decrees referring to Medicare plans reads:

"Highmark and UPMC mutually agree that vulnerable populations include [consumers] age 65 or older who are eligible or covered by [Medicare and Medicaid plans, and] with respect to Highmark covered vulnerable populations, UPMC shall continue to contract with Highmark at in-network rates for all of its hospital, physician and appropriate continuity of care services ... UPMC shall treat all Medicare participating consumers as in-network."

The provision does not appear, however, to explicitly prohibit Highmark from offering a narrow-network product, and Highmark will continue to offer several Medicare Advantage products that offer full access to the UPMC network. UPMC says that's not enough, though.

"Highmark has been telling the community for three years in a multitude of TV, print and radio ads that all seniors will have in-network access to UPMC," said UPMC spokesman Paul Wood.

In Highmark's own letter to Gov. Tom Corbett, Highmark CEO David Holmberg notes that the narrow-network Medicare Advantage plan has already been approved by the U.S. Centers for Medicare & Medicaid Services, which is the federal agency that runs the Medicare system. State approval, Highmark argues, isn't needed for Medicare plans.

Highmark also says that UPMC Health Plan, which is UPMC's insurance arm, "for years [has] offered a Medicare Advantage product that is basically limited to UPMC providers," and excluded Allegheny Health Network facilities and other community providers.

Currently, Highmark has 339,000 Medicare Advantage members, and each of those plan-holders has UPMC access.

The state's actions come late in the game -- Medicare's open enrollment period, the time during which Medicare beneficiaries can select a new plan, begins Oct. 15. Already, Highmark has sold some of the new Community Blue Medicare plans, since those who turn 65 during the year can pick a new plan prior to the open-enrollment period.

The state Insurance Department could not be immediately reached for comment. This Friday, state Reps. Tony DeLuca and Dan Frankel, both Allegheny County Democrats, are convening a meeting of the House Democratic Policy Committee to discuss the Highmark-UPMC transition plan. It's scheduled for 10 a.m. to 1 p.m., Friday, in the third-floor ballroom in Lawrence Hall at Point Park University.

Bill Toland: [email protected] or 412-263-2625.

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