By: Health Insurance
Submitted: 2009-12-13 12:08:44 | Word Count: 381
Though both sides are hopeful an agreement can be negotiated, Somerset Medical Center has notified Cigna HealthCare of New Jersey that it will terminate its contract with the managed-care provider effective Jan. 4, 2010 If an agreement is not reached, customers of Cigna still will be covered at Somerset Medical Center under their plan's "out-of-network" provisions, said Kenneth Bateman, president and chief executive office of the medical center.
Cigna policy holders represent about 3-4 percent of the hospital's patients, Bateman said.
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"We are still actively in negotiations with Cigna and remain hopeful that we will reach an agreement before our current contract expires on Jan. 4," Bateman added. "We understand the impact terminating this contract would have on Cigna patients and we are committed to ensuring their continuity of care."
"We continue to negotiate with Somerset Medical Center and are hopeful that we can reach a mutually agreeable contract that will keep them in the network," said Gwyn Dilday, a public relations representative for Cigna.
In 2006, Somerset Medical Center announced it was terminating its contract with Aetna over a dispute on reimbursement amounts. The termination was canceled after the hospital and insurance company successfully negotiated a new contract.
Bateman said the reimbursement rates offered by Cigna do not offset the increased costs for the medical center to provide charity care for the growing number of uninsured patients. Bateman also noted the decline in government funding at both the state and federal levels.
About half of the hospital's patients are covered by government plans such as Medicare, Bateman explained.
"And you don't negotiate with the government," he said, adding that the government is "ratcheting down" its reimbursements.
More and more hospitals will find themselves in dispute with insurance companies over reimbursements, Bateman predicted.
Emergency medical care will not be affected by the termination of the Cigna contract. Those services should be covered by Cigna in accordance with federal and state laws, with patients paying their standard emergency department co-pay.
