UPMC brings insurance plans to midstate, heightening competition

We’ve met UPMC the provider. Now it’s time for the midstate to meet UPMC the insurer.

Fresh off its affiliation with the Harrisburg-based PinnacleHealth provider network, the University of Pittsburgh Medical Center this week unveiled new Medicare Advantage plans for consumers in the region for 2018 under UPMC Health Plan, its insurance operation.

The move — together with the addition of coverage in northcentral Pennsylvania, where Susquehanna Health became part of UPMC earlier this year, and in suburban Philadelphia — means UPMC insurance products will be available in 51 counties in 2018, up from 36 this year, said John Lovelace, UPMC’s president of government programs.

Plan officials expect to have a presence in all 67 of the state’s counties by 2019, Lovelace added.

UPMC Health Plan’s expansion so far does not seem to be a problem in the midstate. PinnacleHealth and successor UPMC Pinnacle said during and after the affiliation that they had reached or were working on deals to honor existing contracts with regional insurers, reaffirming last month the system’s commitment to continuing to work with multiple payers.

That contrasts with what is happening in southeastern Pennsylvania, where Independence Blue Cross is locked in a contract stalemate with the newly formed Tower Health network, formerly Reading Health System, which has an insurance joint venture deal with UPMC.

About the new plans

In the midstate, UPMC Health Plan will offer two HMO plans and a new PPO plan to customers in Adams, Cumberland, Dauphin, Fulton, Lancaster, Lebanon, Lehigh, Perry and York Counties under the UPMC for Life banner.

Medicare is the federal health insurance program for people who are 65 or older, as well as certain younger people with disabilities or other conditions.

Medicare Advantage Plans must cover all of the services that Medicare covers, often with additional options, such as vision, hearing, dental, and/or health and wellness programs.

UPMC for Life says its Medicare Advantage plans offer additional benefits that include low copays for primary care physician visits, complimentary membership at participating fitness clubs and preventive dental coverage.

Starting Jan. 1, 2018, UPMC for Life members also will have a $0 copay for preferred generic (Tier 1) prescriptions filled at a preferred pharmacy, as well as the lowest possible copays on other drug categories.

For the second year in a row, all UPMC for Life HMO members also will have full in-network coverage when traveling to Florida, meaning they will be entitled to the same benefits and cost sharing when they see a provider in Florida as they do at home in Pennsylvania, as long as they contact the plan to activate the option.

Competition in focus

There are other parallels and contrasts between this year’s moves by PinnacleHealth and what is happening in southeastern Pennsylvania.

When it announced in March to affiliate with UPMC, Pinnacle also announced that it planned to purchase four hospitals from for-profit Tennessee-based Community Health Systems Inc., or CHS: Carlisle Regional Medical Center in Cumberland County, Memorial Hospital in York County and two Lancaster County hospitals: Lancaster Regional Medical Center and Heart of Lancaster.

A hospital deal also took place in Berks County.

Reading Health System — which changed its name to Tower Health this summer — announced in May that it planned to buy five CHS hospitals, in Coatesville, Phoenixville, Pottstown, West Grove and Philadelphia.

The PinnacleHealth-CHS-UPMC transactions seemed to proceed smoothly and with greater coordination. After the CHS purchase but before the UPMC affiliation was complete, records revealed that UPMC already had plans to invest hundreds of millions of dollars into Pinnacle’s midstate properties, including the four hospitals purchased from CHS.

At the same time, PinnacleHealth announced that it had reached deals to preserve network access for patients from various insurers, including Humana Inc. and Capital Blue Cross. After the affiliation, UPMC echoed that commitment to working with multiple payers.

In southeastern Pennsylvania, meanwhile, events headed in a different direction with also one major insurer.

Before buying CHS hospitals, Reading Health last year entered into a joint venture with UPMC Health Plan to sell health insurance in Bucks, Chester and Montgomery Counties.

Even before the CHS deal closed last week, Independence Blue Cross (IBC) had raised concerns about the UPMC joint venture, seeking a non-compete clause as part of contract negotiations, according to a statement from Tower Health.

Tower refused and, when the sale was concluded, the old deals ended, the Philadelphia Inquirer reported, putting the five hospitals out of network for 120,000 IBC members, although the insurer posted a website for consumers, informing them about a 30-day grace period and other care options.

Anthony V. Coletta, president of facilitated health networks at Independence Blue Cross, told the Inquirer that Tower officials made it clear they intended to compete, and that IBC objected to “funding a rival.”

The negotiations continue.

Roger DuPuis
Roger DuPuis covers Cumberland County, health care, transportation, distribution, energy and environment. Have a tip or question for him? Email him at rdupuis@cpbj.com.

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