The Facts Behind the Highmark Contract Dispute

By: Paul Wood

The news over the past few months has been full of varying messages about the end of the Consent Decrees.

It’s important to reflect on where this started, back in 2011, and where we are today, with the Consent Decrees set to end on June 30. It’s easy to forget what set these events in motion, and how UPMC’s decision not to contract with Highmark was made to protect our patients and the world-class health system that so many consider indispensable to their care.


The UPMC-Highmark dispute is a direct result of Highmark’s decision in 2011 to acquire the nearly bankrupt WPAHS and Highmark’s demand for a system-wide contract with UPMC — a contract that would allow Highmark to “flash” access to UPMC hospitals and physicians in order to sell its insurance products but then place UPMC in a tier unaffordable to most of its members in order to steer them into Highmark’s own struggling hospitals.

•  In its strategic plan filed with the Pennsylvania Insurance Department in 2013, Highmark — which controlled 70+% of the insurance market at that time—revealed it would need to steer 41,000 in-patient admissions annually away from UPMC to Allegheny Health Network in order to assure the survivability of AHN.

•  The 41,000 represented nearly 25% of UPMC’s admissions at the time, and — as UPMC made clear in its public statements — losing that amount of volume would be the equivalent of closing UPMC Shadyside and UPMC Mercy and with it, their 11,000 jobs.

•  Such a scheme by Highmark not only would harm UPMC and its patients, but also the University of Pittsburgh and the entire western Pennsylvania region. At its core, Highmark would cause serious harm to patients since its benefit design would preclude them from using the UPMC physicians and hospitals they desire.

•  Recognizing the harm Highmark would inflict on UPMC’s charitable mission and UPMC’s patients, UPMC’s Board of Directors adopted a resolution in 2013 prohibiting management from entering into a system-wide contract with Highmark and directing management to focus on transitioning the relationship with a definitive end-date.

•  The June 30 expiration of the Consent Decrees is the definitive termination date all parties — UPMC, Highmark, Attorney General, PID and DOH — agreed to in 2014.

•  UPMC’s no-contract decision was never about contract rates nor whether Highmark members could continue to access UPMC, albeit on an out-of-network basis.


UPMC has driven the positive and drastic transformation of western Pennsylvania from a highly concentrated insurance market to a highly competitive, pro-consumer market with some of the lowest costs in the nation.

•  Almost every business and organization in western Pennsylvania now offers their employees affordable insurance options so they can access the high-quality care of UPMC hospitals and physicians. Seniors have more choice than ever of affordable Medicare Advantage products with unfettered access to UPMC.

•  People’s choice of providers often drives their choice of insurers if the insurer is focused on customer service, is cost-competitive and fair access is unimpeded by the benefit design of their insurance product.

•  Led by the UPMC Health Plan, insurance costs in Pittsburgh now rank among the lowest of the nation’s 30 largest metropolitan areas. Today, UPMC Health Plan is the largest medical insurer in western Pennsylvania, benefitting both consumers and employers.


UPMC’s financial strength reflects its preferred provider status, supported by continuous investment back into research and medicine as part of its non-profit charter to meet the increasing demand for UPMC’s outstanding innovative care.

•  UPMC’s commitment to the communities it serves is second to none.

•  UPMC’s financial strength enables it to continue to fulfill its charitable mission and provide more care to our region’s vulnerable populations than any other hospital system.

•  UPMC’s $1.2 billion in IRS-defined community benefits is more than any other hospital system in Pennsylvania and more than the vast majority of other academic medical centers and large regional health systems in the nation.