PITTSBURGH – At a hearing on Monday on UPMC’s denial of access to subscribers of Highmark’s Community Blue health plan, members of the House Democratic Policy Committee heard complaints that could foreshadow a broader denial of access – which potentially could touch Blair County.
“The issue we’re facing today with Community Blue, we’ll probably be facing it in 18 months,” said Pittsburgh-area state Rep. Dan Frankel, looking ahead to the end of 2014, when UPMC – which plans to acquire Altoona Regional Health System – says it won’t renew its contract with Highmark.
“Three million people [could be] potentially disenfranchised,” Frankel said.
It’s a problem that won’t happen, according to a written statement issued by UPMC before the hearing, because at the end of 2014, Community Blue will expire, and Highmark subscribers will be able to access UPMC facilities by paying regular out-of-network surcharges.
UPMC is denying Community Blue subscribers now because of a clause that prohibits the medical center from “balance billing” for those surcharges, according to UPMC.
In a second statement issued before the hearing, UPMC also offered to begin serving Community Blue subscribers now, provided Highmark permitted the balance billing.
It wasn’t clear what the outcome of that offer would be.
During the hearing, Highmark executives alleged that UPMC is violating a clause in the Community Blue contract that called for access in exchange for direct payment by Highmark.
UPMC “abandoned” its patients and failed to fulfill its provider’s mission in denying service, they said.
The thorny problem of UPMC access for Highmark subscribers is indicative of a “badly broken” system in southwestern Pennsylvania, “at risk of becoming a national embarrassment,” said Harold Miller, executive director of the Center for Healthcare Quality and Payment Reform, one of the experts the committee called to testify.
It’s a system – here and nationwide – that needs far more fixing than just getting UPMC and Highmark to work together, Miller said.
“The only way we will get higher-quality, lower-cost health care is if everyone works together to create a very different system for delivering and paying for health care,” Miller told the committee.
He then laid out a detailed prescription for a health system cure:
Patients need to choose hospitals and doctors based on quality and cost, like they do in buying most things, because that will allow competition to work. Otherwise, there’s no incentive for the providers to do the necessary hard work, he said.
Lawmakers can help by ensuring that providers can’t refuse “tiered” contracts, by which health plans allow subscribers to access any provider, paying more for costlier care, while knowing the quality of all the care offered.
Lawmakers, however, will need to define “good tiering,” he said.
Community Blue is allegedly tiered but is more properly a “narrow network” option, as it places UPMC alone in the out-of-network category, he said.
Lawmakers can also “jump-start this process” by requiring that all state employees use a tiered plan, he said.
Providers also need to stop discriminating on price, Miller said.
“There is a huge variation in the amounts that different hospitals and health systems are paid for doing the same procedures, and in many cases, the lower-cost providers also deliver higher-quality care,” he said.
Big health plans and big businesses get big discounts; smaller organizations get smaller discounts; and the uninsured – those least able to afford it – get no discounts, he said.
Providers don’t want to disclose the discounts for fear others will demand the same or say what they’re charging the uninsured, out of embarrassment, he said.
“We would not tolerate discriminating against people based on their employment and income anywhere else,” he said.
To end the discrimination, lawmakers can prohibit discounts, he said, as Maryland does.
They should also require providers to disclose prices publicly, he said. That would allow patients, rather than health plans, to make the cost choices.
Thus “all patients and all health plans would be paying the same provider the same amount for the same care,” he said.
Providers need to be transparent about performance, according to Miller.
“No one wants to choose a lower-priced physician or hospital if they feel they are going to get low-quality care,” he said.
But it’s currently almost impossible to determine quality, although “the limited information that’s available suggests that the quality of health care in southwestern Pennsylvania is a lot worse than people realize,” he said.
Lawmakers can help by funding the creation of publicly accessible resources on quality, which in turn would require providers to submit the necessary data, according to Miller.
That could happen if the state provided more funding and the proper direction to the Pennsylvania Health Care Cost Containment Council, said Geoff Webster, managing director of Value Capture, who also testified at the hearing.
The data would not only need to be more comprehensive, but more timely than that provided by PHC4, Webster said.
Health plans need to make providers “accountable” with their payment methods, according to Miller.
Current fee for service methods can reward providers for messing up – for example, when they have readmissions.
They can also penalize them for good work – for example, when they prevent illness.
Accountable care payment systems try to counter those misaligned incentives with initiatives like warranties on care, along with higher initial charges.
Geisinger Health System has helped to pioneer this for some services, waiving the cost of preventable readmissions, according to Miller.
Lawmakers could encourage accountable care payments by requiring it for state employees, he said.
Lawmakers can also ensure fair treatment of teaching and research hospitals that subsidize their educational activities by charging more for care by providing a separate funding mechanism, Miller said.
They can alleviate the temptation of providers who have a monopoly on some aspects of care in a particular area by setting up a system to regulate their prices like the Public Utility Commission regulates utility prices, he said.
And they can help ensure provider competition by eliminating barriers that now make it difficult or illegal for independent hospitals and doctors from cooperating to get the efficiencies of scale, Miller said.
May 1st, 2013