Mercy Medical Center, which has been in negotiations with Cigna over reimbursement rates, is set to leave the Cigna network at midnight Oct. 14 pending any agreement. Part of Trinity Health Of New England, stalled negotiations will affect the hospital as well as Weldon Rehabilitation Hospital.
Connecticut-based insurer Cigna said Monday it would like to retain Mercy Medical Center in its network but “not at the excessively high rates” it says the hospital has requested.
Mercy and its affiliate, Weldon Rehabilitation Hospital, both part of Trinity Health of New England, are scheduled to exit the network Tuesday after months of negotiations over reimbursement rates with Cigna that has contracts with other area hospitals.
Asked if negotiations are ongoing, Cigna spokesman Mark Slitt said the “lines of communication with Mercy are open.”
“Cigna would very much like to keep Mercy Medical Center in our network, but not at the excessively high rates that it’s demanding from our clients and customers,” Slitt said. “The problem is price. Mercy Medical Center thinks that Cigna customers should pay more than what is normal in the region, and we think that’s just wrong.”
He referenced Mercy’s earlier statement in which it characterized its requested rate increases as “fair” and “reasonable” and Cigna’s failure to meet them as “pushing Mercy out of network” and “forcing the burden of higher out-of-pocket costs onto its members.”
“Let’s be clear about how this has unfolded and who is forcing whose hand. It was Mercy Medical who decided to end the contract, not Cigna,” Slitt said.
“Mercy demanded a rate increase for Cigna customers that was 10 times the Consumer Price Index in the area. That’s neither ‘fair’ nor ‘reasonable.’ When Cigna said it would agree to an increase in line with the CPI, Mercy walked away from the negotiating table. Mercy is forcing itself out of the network.”
Slitt said that “approximately 85 percent of Cigna’s business” with Mercy is “through employer-sponsored plans that are self-funded.”
This means, for example, that if a patient has a surgical procedure with a negotiated rate of $600, they would pay $120 of that if they have met their deductible and have a co-payment of 20 percent.
The remaining $480 under a self-funded plan would be paid by the employer and not the insurer who pays the balance under “fully-insured” plans.
Slitt said under this scenario a hypothetical rate increase of 15 percent would add $90 to a $600 negotiated procedure rate, raising the patient’s cost to $138 and employer’s to $552.
“When the underlying costs of care go up, so do employer and customer costs,” Slitt said.
Mercy, a short-term acute care hospital with 317 staffed beds, lost $12.7 million last year.
Commercial/managed care represent about one-quarter of its insurance payor mix.
Mercy has said that the percentage increase it is requesting also “attempts to provide Cigna with several years to make up some of the differences where Cigna has not provided Mercy with reimbursement to pay for the cost of providing services, primarily in inpatient services.”
Source: Masslive