University Times

University of Pittsburgh Medical Center (UPMC) officials have rejected an offer by HealthAmerica to include UPMC personnel in HealthAmerica's network of physicians.

Meanwhile, HealthAmerica has dismissed Blue Cross's offer to allow doctors employed at HealthAmerica medical centers to join the network of physicians for two Blue Cross plans.

It's the latest skirmish in the war between Blue Cross and HealthAmerica for Pitt's employee health insurance business. And it involves the following forces: UPMC and HealthAmerica In December, Health-America announced that it would be willing to allow its Pitt enrollees to use UPMC doctors as primary care physicians within the HealthAmerica network — although not at HealthAmerica's medical centers, because the center doctors are full-time HealthAmerica employees.

HealthAmerica made the offer in response to complaints by University administrators that HealthAmerica excludes UPMC hospitals and Pitt-affiliated physicians.

Citing UPMC's comparatively high rates, HealthAmerica currently refers patients to UPMC hospitals only when no other area hospitals can provide the services those patients require.

In a Jan. 24 letter to the vice president of medical services of Coventry Corp., Health-America's parent corporation, UPMC Executive Vice President John W. Paul turned down HealthAmerica's proposal to include medical center doctors.

Pitt's medical center "is not prepared to pursue a relationship with Coventry/HealthAmerica," Paul wrote to Gregg Allen.

Referring to HealthAmerica's decision to end its relationship with Montefiore University Hospital when Presbyterian University Hospital bought out Montefiore in 1989, Paul wrote to Allen: "Our previous contract wherein Montefiore University Hospital was an exclusive provider for HealthAmerica was terminated precipitously by you, thereby excluding us. Furthermore, we had been in litigation with you for over three years concerning business dealings of your corporation." "Clearly, there is not sufficient trust in the sincerity or durability of your commitments," Paul continued. "Further, we believe your approach to us now, and the wide dissemination of your letter (in which Allen proposed better relations between HealthAmerica and UPMC), is politically motivated and without substance in an effort to appear more attractive to the University." The litigation that Paul referred to involved two lawsuits: * The first, filed by Presby, charged HealthAmerica with breach of contract for transferring its relationship with Montefiore to West Penn Hospital.

* A countersuit by HealthAmerica argued that the company's contract with Montefiore was canceled when the hospital was acquired by Presby and became part of UPMC.

Both sides dropped their lawsuits last fall when Conventry Corp. agreed to buy back, for $50 million, the equity that Presby had acquired in Conventry when Presby took over Montefiore.

Mike Blackwood, Health-America's president and chief executive officer, said Paul's interpretation of HealthAmerica's offer "is just dead wrong." According to Blackwood, the HealthAmerica proposal was a good-faith attempt to address Pitt concerns that Health-America excludes UPMC facilities and personnel — "not that the savings we've proposed for the University are predicated on UPMC accepting our overtures." As for Allen's letter to Paul, which the UPMC executive vice president called "politically motivated and without substance," Blackwood commented: "Gregg (Allen) was saying to UPMC, 'Let's put history behind us and move ahead in a positive way.' They (UPMC) should be satisfied financially with the ($50 million) settlement they got. We're just trying to bury the hatchet and UPMC is trying to raise it again." Allen sent copies of his letter to a number of Pitt administrators, faculty and staff involved in medical rates discussions, but not to anyone outside the University, Blackwood said.

Blackwood added that HealthAmerica currently has contracts with 11 of Pitt's 16 medical practice plans, including plans made up of surgeons, orthopaedists and anesthesiologists. Several of the remaining five have responded "very positively" to recent HealthAmerica contract offers, he said. But those contracts would require a working relationship between HealthAmerica and UPMC, Blackwood said.

Blue Cross and Health America Blue Cross, in its latest package of proposed health insurance rates for Pitt employees, made a surprising proposal: Blue Cross said it would be willing to allow HealthAmerica primary care physicians employed at HealthAmerica's medical centers to become part of the physicians network for Blue Cross's Keystone West and SelectBlue plans — provided the HealthAmerica doctors pass Blue Cross's credentialing process.

Blackwood and Tom Murray, HealthAmerica vice president for marketing, laughed off the proposal.

"There's no way we would consider this," Murray said.

"Basically," Blackwood said, "what Blue Cross is asking us to do is hand over our franchise to them for about 10 cents on the dollar and we're not going to do that. They're suggesting that we let them take advantage of a physicians network that it's taken us 20 years to build." Both men called the Blue Cross proposal a cynical, transparent attempt to allay Pitt HealthAmerica members' fears that a Blue Cross monopoly here would disrupt relations with their primary care doctors.

As for Blue Cross's stipulation that HealthAmerica physicians would have to pass the former's credentialing process, Blackwood called it "an intentional slap in the face." Blue Cross spokesperson Diane Wuycheck denied the charges.

"For proprietary reasons, we do not discuss details of our proposals," she said. "However, we can reinforce the fact that the proposals we have advanced are sincere and, in our judgment, workable."

— Bruce Steele