Highmark plans to terminate its Pennsylvania contract with Rothman Institute on Oct. 1
The Pittsburgh insurer said 10,200 of its members have used Rothman services in the past year.
Highmark plans to end its Pennsylvania contract with Rothman Institute on Oct. 1, according to a letter to members. The insurer claimed that about a half-dozen Rothman surgeons had abused a federal process designed to protect patients from unforeseen out-of-network bills.
The dispute centers on the use of out-of-network physician assistants by Rothman surgeons who do not have residents or fellows working for them and need help treating patients, Rothman president Alexander Vaccaro said in an interview Wednesday.
Rothman physicians are under contract with Highmark, but the physician assistants used by some doctors work for a separate company that Rothman has no control over, he said. He said it’s hard for some doctors to keep physician assistants on staff because there’s so much demand for those skills.
“Now they’re kicking us out, so now we’ll be that out-of-network provider. We will be that individual that Highmark is trying to go after,” Vaccaro said.
From Highmark’s perspective, the use of out-of-network clinicians violates a contract that took effect at the beginning of last year, said Dan Tropeano, president of Highmark’s Southeastern Pennsylvania market.
Even if some Rothman surgeons use out-of-network assistants, they don’t have to go through arbitration for payment, he said. They could instead accept standard out-of-network reimbursement, he said. That’s usually based on Medicare rates, plus some additional percentage.
Help for patients turned into controversy
Congress passed the No Surprises Act in 2020 to prevent patients from facing unexpected bills from out-of-network doctors when they receive care at an in-network hospital. This was a particular problem in emergency departments. The law has been successful on that front.
However, it also created what has become a controversial arbitration process to determine what insurers should pay out-of-network clinicians. Sometimes, that has led to arbitration decisions for amounts that are many times the in-network price, according to the New York Times and other news outlets.
Highmark’s dispute with Rothman centers on that arbitration process, also known as independent dispute resolution (IDR).
“We feel like they’re egregiously abusing the No Surprises Act and the arbitration or IDR process that comes along with it,” Tropeano said in an interview.
Rothman physicians’ use of arbitration for out-of-network physician assistants had caused “significant increased costs to Highmark and its self-insured clients,” Highmark said in a statement posted to its website in July.
Vaccaro said that if Highmark paid a fair rate for physician assistants some doctors need to use, arbitration wouldn’t be needed.
Patients caught in the middle
The dispute is bad news for James Pavlock, a retired federal prosecutor who has a form of Medicare supplemental insurance from Highmark.
“It’s a big deal for me. I’m supposed to have surgery on Oct. 13. Do I go forward and pay thousands of dollars potentially?” the Fairmount resident said in an interview Tuesday, the day he received a letter from Highmark dated Sept. 2 about the termination.
Highmark said 10,100 Highmark members had used Rothman services in the past year.
Highmark will help patients in Pennsylvania find alternate sites of care, including at Penn Medicine and Main Line Health.
Rothman will work with patients to use out-of-network benefits to continue receiving care from Rothman, Vaccaro said. The dispute with Highmark will not impact New Jersey patients, he said.
Physician-owned Rothman is the largest orthopedic practice in the Philadelphia region.
