By James
Gutman - October 22, 2014
The health
insurance industry’s equivalent of the feud between the Hatfields and the
McCoys sprung up again this month, and the new battleground is Medicare
Advantage (MA) products for 2015. Specifically, Highmark, Inc. on Oct. 1
unveiled a new MA product, Community Blue Medicare HMO, with both zero-premium,
high-cost-sharing and high-premium, low-cost-sharing options available. And the
network for the product does not include the providers of its fellow
Pittsburgh-area giant and archrival UPMC.
This in itself
wouldn’t be particularly notable were it not for the context, which includes a
consent decree in state court that Pennsylvania officials had induced Highmark
and UPMC to sign this summer in an effort to resolve their longstanding and
public dispute over just about everything. That consent decree defined Medicare
beneficiaries as a “vulnerable population” for which Highmark would have to
negotiate in good faith to reach an “in-network” agreement with UPMC covering
hospital and physician services, among other things. But the document did not
specifically prohibit Highmark from offering a narrow-network product.
When it became
clear that this is exactly what Highmark is doing for 2015 on one of its
numerous MA products, the outcry came quickly. UPMC’s formidable public affairs
staff said it “reached out to the state” when it learned “Highmark intended to
violate the consent decree,” and three state agencies, in a recently rare
display of bipartisanship in Pennsylvania, quickly said they’ll seek remedies
in Commonwealth Court for the consent-decree violations, although they also
criticized both companies for their “continued discord.” When Highmark didn’t
back down, contending the agencies were well aware of its plans for the new
product while the consent decree was being negotiated, the agencies did file
suit to prohibit Highmark from marketing any limited-network MA product that
excludes UPMC providers.
This was just
the beginning. One of the state agencies, on the same Oct. 10 date of the
lawsuit, sent agents and brokers in Pennsylvania a one-page notice warning them
against offering the new Community Blue product. (An insurance broker a few
days later cautioned agents they could lose their license as well as be fined
by the state if they did market the product.) Also on Oct. 10, Highmark sued
the state in federal court to block the Pennsylvania enforcement actions, maintaining
that CMS had approved the product, that federal law supersedes state law and
that the insurer had offered UPMC a chance to participate in the new product
but was turned down.
What do you
think of this situation? Is Highmark right when it contends that halting the
product would be against the interest of Pennsylvania seniors? Is UPMC right
when it says the insurer’s actions are the equivalent of dirty pool? Do brokers
have any feasible options aside from not selling the product? How should the entire
situation be resolved? And is this clash of titans destined to be replicated in
other MA markets in the coming years, or is this just a case of “bad blood”
that no consent decree can overcome?
http://aishealth.com/blog/medicare-advantage-and-part-d/showdown-highmark-noon-insurers-new-narrow-network-product-prompt?utm_source=Real%20Magnet&utm_medium=Email&utm_campaign=55637447
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