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Board favors UPMC

Highmark pays to settle claims

PITTSBURGH — Health insurer Highmark has agreed to pay up to $188 million to the University of Pittsburgh Medical Center to settle past claims over payments for cancer patients, the hospital system said.

A three-member arbitration panel found that Highmark wrongly lowered payments to the hospital system for patients with Highmark’s commercial plans between April 2014 and October 2015.

“To now argue, as Highmark does, that it had the right to unilaterally invalidate the agreed-upon commercial hospital rate increases is completely lacking in credibility or evidentiary foundation,” the arbitrators wrote in their decision, which UPMC included with a filing Tuesday with a municipal regulator.

The arbitrators’ ruling covered only UPMC Presbyterian Shadyside Hospital, which was awarded $24 million for treating Highmark members with cancer. But both sides agreed to apply the ruling to the rest of the system’s cancer payments, according to the regulatory filing.

Negotiations on cancer therapy rates began in 2010. They broke down a year later when the insurer decided to buy the West Penn Allegheny Health System.

UPMC was displeased that Highmark was paying less than other insurers for hospital services, according to the panel. The health system converted many of its physician-based clinics to hospital-based clinics, increasing reimbursement rates by about $100 million each year. Highmark initially paid the higher rates, but later lowered them.

Insurance brokers said higher costs of care will be passed along to members as a result of the ruling, which will result in higher rates for people with group health insurance through Highmark.

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