The hospital giant booked $118 million in money owed to the system by Highmark over two fiscal years for the period ending Dec. 31, which compares to $177 million in operating income reported for the period. In a lawsuit filed last October, UPMC claimed Highmark had breached contracts covering payment for cancer care.
In April 2014, Highmark, UPMC’s biggest rival in western Pennsylvania, stopped paying so-called facility fees for administration of chemotherapy and other cancer services that were provided in a doctor’s office. Medicare allows doctors to receive higher reimbursement for care when it’s rendered at facilities designated as hospital outpatient centers, and Highmark said it was not going to pay the higher fees.
Highmark said the billing change would cost $200 million a year without affecting the quality of care. A hearing in the case was scheduled March 2 in Allegheny County Common Pleas Court.
UPMC spokeswoman Susan Manko said the system would have no further comment on the disclosure. UPMC “believes that the entire amount of the disputed accounts receivable from Highmark is fully collectible,” according to the system’s most recent financial statement.
Brian Kassalen, partner at the New Castle-based accounting firm of Arnett Carbis Tothman LLP, said such bills for services are typically added to financial statements after assessing for the likelihood of being collected. He was not familiar with the Highmark-UPMC lawsuit.