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Auditor general threatens UPMC over dispute with Highmark

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Thursday, May 9, 2013, 12:01 a.m.

The pressure on hospital giant UPMC to extend contracts with competitor Highmark ratcheted up Wednesday when the state auditor general threatened UPMC with an audit if it doesn't let Highmark insurance customers into its hospitals after 2014.

Eugene DePasquale, a Democrat elected to statewide office in November, said taxpayer money supports UPMC, giving him authority to examine the hospital network's books.

“Pittsburgh has world-class hospitals that have been supported with public funds through grants and tax exemptions,” he said at a news conference Downtown. “Therefore, not a single person should be denied access to the care they need because of the health insurance they carry.”

He said UPMC receives a large portion of more than $1 billion in Medicaid funding that the state distributes in Western Pennsylvania and has received $64 million in state grants to support expansion of its facilities.

UPMC, which owns 19 hospitals in the region, has said it will not offer contracts to Highmark because it is a direct competitor now that it has completed its purchase of West Penn Allegheny Health System.

UPMC spokesman Paul Wood declined to respond directly to DePasquale's threat. But he said Highmark members who want to keep in-network access to UPMC should switch insurers to UPMC Health Plan, Aetna Inc., Cigna Corp. or United Healthcare.

“Highmark's plans will be built on steering substantial numbers of their policyholders away from their preferred world-class UPMC doctors and hospitals, instead forcing them into a less-than-desired WPAHS,” Wood said.

UPMC is facing criticism from some Harrisburg lawmakers for its stance — although most have been Democrats so far. Republicans control the state House and Senate.

Gov. Tom Corbett, a Republican who mediated an 18-month extension of the UPMC-Highmark relationship last year, hasn't taken a position on whether contracts should be extended further.

Christine Cronkright, a Corbett spokeswoman, said the governor is monitoring the situation. She declined to comment further and referred questions to the state Insurance Department.

Melissa Fox, an Insurance Department spokeswoman, said there is little the department can do under state law to force the two health care titans to work together.

Last year, a majority of House lawmakers, led by Republican representatives from Western Pennsylvania, passed an amendment to state law giving the insurance commissioner power to force health insurers and hospital systems into contracts. Although the bill never became law, the action was credited with forcing UPMC to grant the contract extension that gives Highmark members access through the end of 2014.

Highmark, which owns the state's largest health insurance company, completed its $1.1 billion acquisition of West Penn Allegheny last week, giving it five hospitals for its new health system, which is called Allegheny Health Network. The new system, which also owns Jefferson Regional Medical Center and St. Vincent Health System in Erie, plans to compete with UPMC for patients in Western Pennsylvania.

Highmark spokesman Aaron Billger said all of its Allegheny Health Network hospitals will be open to all health insurers, and UPMC should do the same.

“After all, our local hospitals were built for the community with support from tax dollars, corporate contributions and generous community donors,” he said.

Alex Nixon is a staff writer for Trib Total Media. He can be reached at 412-320-7928 or

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