Highmark pushes members to use lower-cost facilities under new tiered plans
By Alex Nixon
Published: Friday, March 22, 2013, 12:01 a.m.
Highmark Inc. has introduced a third health insurance plan in Pennsylvania that seeks to lower premiums by pushing members to choose less expensive hospitals and doctors.
The state's largest health insurer is targeting the north-central part of the state with Community Blue Premier Flex, which offers members a broad network in which to chose hospitals and doctors. But it will try to get members to use lower-cost facilities through financial incentives, which should lead to lower premiums for employers.
“The number one question from businesses is how can we lower our health care costs; this kind of product helps give them cost savings choices,” Steven Nelson, Highmark senior vice president of product, marketing and strategy, said in a written statement. “We estimate that employers can save up to 20 percent on their premium costs depending on the group's current utilization.”
The introduction of Premier Flex follows Community Blue, which Highmark began offering in Western Pennsylvania on Jan. 1, and Choice Blue, which debuted in Erie, Crawford and Warren counties last year.
Premier Flex and Choice Blue use a tiered network to push members toward lower-cost facilities. Community Blue reduces costs by excluding UPMC, the largest hospital system in the region, from its network.
Premier Flex will be offered to companies in Centre, Columbia, Juniata, Mifflin, Montour, Northumberland, Schuylkill, Snyder and Union counties, starting July 1. Highmark has 130,000 members in that region.
The new plan is referred to as a tiered product because it has three benefit levels that affect a member's out-of-pocket costs, depending on which hospital or doctor they choose for medical services.
In the first tier, out-of-pocket costs will be lower at Evangelical Community Hospital in Lewisburg, Lewistown Hospital, Mount Nittany Medical Center in State College, Schuylkill Medical Center's two hospitals in Pottsville, St. Luke's Miners Memorial Hospital in Coaldale and Sunbury Community Hospital.
In the second tier are Berwick Hospital Center and Geisinger Health System hospitals in Danville, Bloomsburg and near Shamokin. Members will pay more to access medical services at those facilities, but not as much as they would at out-of-network hospitals, which are the third tier.
For example, hospital services in the first tier are 100 percent covered after meeting a family deductible of $1,000. In the second tier, hospital stays are covered at 80 percent after a $2,000 deductible. And the third tier, or out of network, will cover 60 percent of costs after a $4,000 deductible.
“You could save 20 percent by implementing this because ... employees are likely to use the lower-cost providers,” Highmark spokeswoman Kristin Ash said.
Highmark could expand Premier Flex to Western Pennsylvania, Ash said.
That could be difficult because UPMC has refused to agree to tiered reimbursement contracts. UPMC has accused Highmark of trying to use its Community Blue plan as a tiered product by telling Western Pennsylvania members that they can continue to access the system's 19 hospitals if they pay more.
Highmark has said UPMC signed contracts that allow the higher payments, but UPMC has refused to treat Community Blue members.
Alex Nixon is a staff writer for Trib Total Media. He can be reached at 412-320-7928 or firstname.lastname@example.org.
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