HealthAmerica has been negotiating reimbursement contracts with West Penn Allegheny Health System hospitals and doctors for decades.
So, the health insurer was caught off-guard earlier this year when WPAHS demanded a 30 percent increase with annual escalators of 10 percent as part of a new agreement, according to a new Insurance Department filing. Things worked out after “spirited” negotiations and “we renewed the contract on what we considered fair and appropriate terms,” President and CEO David Fields wrote in the filing.
But a similar thing happened when HealthAmerica negotiated a new contract with St. Vincent Health System, according to the letter: SVHS demanded a first-year increase of 38 percent, the highest in 10-plus years of HealthAmerica’s dealings with the Erie health system.
The common denominator? Highmark was preparing to control or had already taken over each health care system, giving rise to a new worry for Fields: Highmark’s plan to create a giant health care delivery network could wind up empowering Highmark at the expense of other insurers and, ultimately, consumers.
“The potential marketplace power to be ceded to Highmark, and that which already exists with the provider monopoly enjoyed by UPMC, is enormous,” Fields wrote. “All we ask is that there be a fair and competitive marketplace for health insurance.”
Not to worry, Highmark answered in a subsequent filing. The company has firewall protections in place to prevent sharing of information between Highmark’s medical provider and health insurance arms.
And the double-digit reimbursement rate increases sought by St. Vincent and WPAHS? Highmark also is facing double-digit reimbursement demands in negotiating provider contracts, according to the company.
“Such increased ‘demands’ from providers are emblematic of today’s new reality in the health care market and are not evidence of Highmark’s influence,” the company wrote.
Pittsburgh Business Times
April 25th, 2013