An agreement between Highmark and UPMC is expected to be announced at 12:30 p.m. today by Gov. Tom Corbett’s office today, sources have told the Post-Gazette.
Details of the agreement were not immediately known and none of the parties involved would comment this morning.
Legislators and others said today that a three-year pact, until 2015, would allow Highmark subscribers to continue to pay in-network rates for services provided by UPMC hospitals and doctors.
Sen. Jim Ferlo, D-Highland Park, said that Highmark representatives were in Harrisburg on Tuesday, including vice president Deborah L. Rice and executive vice president Dan Onorato.
Sen. Ferlo said that Sen. Don White, R-Indiana, chairman of the banking and insurance committee, met with Mr. Corbett yesterday to talk about "trying to pound UPMC and Highmark into some kind of accommodation."
Sources said those meetings came after the governor’s office mediated meetings last week between Highmark and UPMC.
A source said that the new contract will involve new, higher reimbursement rates for Highmark to pay, which is said to bring them more in line with the rates the commercial insurers are now paying.
UPMC has pacts with national insurers and did not want to undercut those by allowing Highmark to pay rates netogiated in 2002.
"It’s certainly important for Western Pennsylvania," said state Rep. Tony DeLuca, D-Penn Hills, minority chair of the Insurance Committee. "The fact is, we’re talking about Highmark subscribers being able to use the 20 facilities and 3,000 doctors which most of the people are worried about. They also, hopefully, within the three years, can get West Penn Allegheny on their feet and save 11,000 jobs. That’s good news for the area, it’s good news for the workers. It’s good news for the Highmark subscribers."
The agreement comes little more than a year after negotiations broke down between the two health giants, with UPMC saying it would not negotiate with Highmark once it became known that the insurer intended to buy the financially-ailing West Penn Allegheny Health System and compete with UPMC in the health provider market.
Highmark said UPMC was asking for a 40 percent increase in reimbursement payments, but continued to say it wanted to continue negotiations.
Early in the dispute, UPMC signed contracts with four national insurers — Aetna, United Healthcare, Cigna and HealthAmerica — and encouraged Highmark subscribers to consider changing their insurance if they wanted to keep their doctor.
Those contracts reportedly contain more favorable reimbursement rates than UPMC had with Highmark, which may have put pressure on Highmark to soften its position.
For months the two sides could not even agree when terms of the current 10-year contract expired.
UPMC maintained the one-year run out period, which would go to June 30, 2013, applied only to hospital services but not services provided by UPMC physicians.
In December, Gov. Corbett’s office brokered an agreement that assured Highmark subscribers in-network access to UPMC physicians and hospitals through June 2013.
Highmark, meanwhile, has been rebuilding the West Penn Allegheny system, reopening the West Penn Hospital emergency department in Bloomfield and, in January, announcing a $20 million upgrade to the Forbes Regional Hospital campus in Monroeville.
Ratcheting up the stakes in the eastern suburbs, Highmark officials said in February that they would not sign a one-year agreement that would include in its network UPMC East, scheduled to open this summer less than two miles from Forbes Regional.
