PITTSBURGH (AP) — Health insurer Highmark Inc. has sued the University of Pittsburgh Medical Center claiming the hospital network has overbilled it by $300 million for cancer drugs since 2010.
Highmark's lawsuit, filed late Wednesday, contends UPMC has been charging for chemotherapy treatments administered at doctor's offices as though they were performed at hospital outpatient clinics. Hospital outpatient clinics charge more for the same treatments.
"UPMC has managed, through billing manipulation, to increase costs by $300 million without any improved outcomes for cancer patients," said Highmark spokesman Aaron Billger.
UPMC spokesman Paul Wood said that Highmark's seven-hospital Allegheny Health Network bills for cancer treatments the same way UPMC does and that Highmark is trying to circumvent a court-approved consent decree between the two Pittsburgh-based health care giants by filing the lawsuit.
"Highmark's latest lawsuit is not only a meritless attack on a reimbursement system Highmark itself designed and endorsed but also a blatant violation of the consent decree," Wood said.
Under the June decree, Highmark and UPMC are supposed to submit any ongoing fee disputes to an arbitrator. The agreement grew out of concerns that many Highmark subscribers will lose in-network access to UPMC hospitals and doctors when the current contract between the health care rivals expires at year's end.
Highmark, a Blue Cross Blue Shield insurer, has 3.2 million subscribers in western Pennsylvania and has purchased seven hospitals in recent years to compete with UPMC. UPMC offers its own health insurance and runs 22 hospitals and 400 outpatient sites, making it western Pennsylvania's dominant hospital and provider network.
The June decree was struck to ensure that Highmark customers being treated by UPMC providers wouldn't have to change doctors or hospitals when the provider contract expires. But it also includes an agreement that Highmark and UPMC submit to arbitration other disputes over fees, insurance reimbursements and other unresolved issues.
Billger said the lawsuit was filed to protect consumers who pay higher premiums when providers like UPMC charge more for services.
Health policy experts said the lawsuit is part of a bigger issue raging nationally over billing for oncology services. A National Institute of Health Care Reform study showed hospitals charge roughly twice as much as doctor's offices for the same services.
"Highmark appears to be at the forefront in confronting hospitals about these facility payments," said Alwyn Cassil, a consultant with Policy Translation based in Silver Spring, Maryland.