Highmark sells Medicare claims business to prevent conflict of interest

Highmark is selling its Medicare claims processing business to avoid any conflict-of-interest issues related to its purchase of West Penn Allegheny Health System (WPAHS). Blue Cross Blue Shield of Florida's subsidiary, Diversified Service Options, is buying Highmark Medicare Services (HMS) for an undisclosed sum.

"This change was prompted by Highmark's provider strategy," Highmark Vice President David O'Brien said in a statement. "The decision was a difficult one, but one which best positions HMS to maintain its current business and pursue its government business growth strategy."

HMS processes Medicare claims for the federal government in Pennsylvania, New Jersey, Maryland, Delaware and the District of Columbia. If Highmark didn't sell HMS, it would have owned a hospital that bills Medicare as well as a company that processes those claims, which violates federal requirements, reports the Pittsburgh Business Times.

Highmark officials said they anticipated this issue while making plans to purchase WPAHS, so they immediately began talking with the Centers for Medicare & Medicaid Services about how to proceed, according to the Pittsburgh Post-Gazette.

Although HMS generated about $100 million in revenue, Highmark said selling the company won't impact the insurer's bottom line.

To learn more:
- see the Pittsburgh Business Times article
- check out the Pittsburgh Post-Gazette article

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