HARRISBURG, Pa., April 6, 2017 /PRNewswire-USNewswire/ -- Insurance Commissioner Teresa Miller today asked for public comment on a request from Highmark Health (Highmark) to end, in most instances, required Insurance Department notification or approval of fund transfers from Highmark, Inc. to the Allegheny Health Network (AHN), a system of hospitals and other health care facilities with which the insurer affiliated in 2013. The public comment period begins Saturday, April 8, and ends Monday, May 8, 2017.
Highmark submitted a request to modify the Insurance Department's 2013 Order (Order No. ID-RC-13-06) approving Highmark's creation of AHN, which now requires Insurance Department approval of financial commitments or donations from Highmark, Inc. and its affiliates not only to entities within Highmark Health's integrated delivery and financing system, but also to third parties that have no affiliation with this system. Currently, Insurance Department approval is required for any fund transfer of $250 million or more within the immediately preceding 12-month period, and department notification is required for transfers of $100 million or more.
"This request significantly modifies the terms under which the Insurance Department approved Highmark's affiliation with AHN, and because the financial health of both Highmark and AHN directly impacts so many people in western Pennsylvania, I want to hear from the public as I consider this request," Commissioner Miller said.
Highmark would still be required to seek department approval if the proposed financial commitment would cause Highmark's risk-based capital to drop below the level required by the Insurance Department to ensure Highmark can pay all claims submitted by its health insurance customers. Risk-based capital is the measure by which the Insurance Department assesses an insurer's financial stability.
"Protecting the health insurance consumers of Highmark will always be my top priority, and that will be the key consideration as I evaluate this request," Commissioner Miller said.
Accompanying Highmark's request is the Allegheny Health Network Strategic and Financial Plan, 2017-2020, which lays out Highmark's plan to stabilize the hospital network, and maintain this network as a major competitor in the western Pennsylvania health care market. As part of this financial plan, Highmark, Inc. will provide up to $850 million in 2017 and 2018 for investments to AHN, as well as forgiving loans of approximately $720 million made to the hospital system. AHN will also refinance $700 million in loans, which are currently guaranteed by Highmark, Inc.
The Insurance Department will also evaluate the AHN financial plan as part of its consideration of this request. The plan projects a significant increase in patient volume and operating income for AHN beginning in 2019 when consent decrees between Highmark and UPMC will end. These consent decrees were entered into in 2014, to ensure that Highmark and UPMC insurance subscribers would have in-network access to a broad array of health care services. The consent decrees have allowed most Highmark, Inc. customers to continue to use UPMC facilities and providers as in-network, but that is set to end in June of 2019.
Highmark is requesting changes to Conditions 10 and 11 of the 2013 Order approving Highmark's purchase of the West Penn Allegheny Health System. The 2013 Order, Highmark's request for modification, and AHN's Strategic and Financial Plan, 2017-2020 are available at www.insurance.pa.gov under "Allegheny Health Network's Financial Plan and Modification Request."
Comments should be sent to email@example.com. Written comments may also be submitted to Joseph DiMemmo, Deputy, Office of Corporate & Financial Regulation, Insurance Department, 1345 Strawberry Square, Harrisburg, PA 17120. Comments may also be faxed to 717-787-8557. Comments should pertain to Highmark's request to modify the 2013 Order permitting the purchase of Western PA Health System.
Following close of the comment period, the Insurance Department will allow two weeks for Highmark to respond to comments. A decision on the request to modify the Order is expected by mid-summer.
MEDIA CONTACT: Ron Ruman- 717-787-3289
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SOURCE Pennsylvania Department of Insurance