Patients Caught In Crossfire Between Giant Hospital Chain, Large Insurer |

It would seem common sense when you pick a doctor that is listed in a provider list for an insurance company, his hospital would also be in the plan?

Zoe Friedland and her husband, Bert Kaufman, are expecting their first child. (Courtesy of Bert Kaufman)

Not so according to this from California Healthline.

Insurance giant Cigna and San Francisco-based Dignity Health have failed to ink a 2020 contract, leaving nearly 17,000 patients in California and Nevada scrambling to find new health care providers. Meanwhile, Dignity faces financial and legal challenges while it strives to implement its merger with Catholic Health Initiatives, which created one of the nation’s largest Catholic hospital systems.

“With so many unpredictable things that can happen with a pregnancy, I wanted someone I could trust,” Friedland said. That person also had to be in the health insurance network of Cigna, the insurer that covers Friedland through her husband’s employer.

Friedland found an OB-GYN she liked, who told her that she delivered only at Sequoia Hospital in Redwood City, California, a part of San Francisco-based Dignity Health. Friedland and her husband, Bert Kaufman, live in Menlo Park, about 5 miles from the hospital, so that was not a problem for them — until Dec. 12.

That’s the day Friedland and Kaufman received a letter from Cigna informing them their care at Sequoia might not be covered after Jan. 1. The insurance company had not signed a contract for 2020 with the hospital operator, which meant Sequoia and many other Dignity medical facilities around the state would no longer be in Cigna’s network in the new year.

Suddenly, it looked as if having their first baby at Sequoia could cost Friedland and Kaufman tens of thousands of dollars. “I was honestly shocked that this could even happen because it hadn’t entered my mind as a possibility,” Friedland said.

This is not an uncommon occurrence. Even if patients are aware of a possible conflict there is often a disconnect between printed materials and reality. In fact, most plans have a statement stating patients should call providers and hospitals to be certain they still honor your plan. In an age when patient-centric health care is promoted, the system often fails miserably.  You are paying a premium, however, contracts place the full burden on you, the patient. 

In this particular case at the beginning of a New Year confusion can reign as computer systems can lag.  Normally plans require 3 mos notice from providers and vice-versa to indicate a change in coverage. Not knowing the particulars in this instance, whether the couple had just obtained this coverage or it had already been in effect.  It is difficult to assign blame for this incident. Certainly, the patient's best interests were not served.  Every state has it's own regulatory mechanism that polices insurers.  This couple should report the incident to that department. Usually the Health Insurance Commissioner or the Department of Health and Human Services.

She and her husband are among an estimated 16,600 people caught in a financial dispute between two gigantic health care companies. Cigna is one of the largest health insurance companies in the nation, and Dignity Health has 31 hospitals in California, as well as seven in Arizona and three in Nevada. The contract fight affects Dignity’s California and Nevada hospitals, but not the ones in Arizona.

“The problem is the price,” Cigna said in a statement just before the old contract expired on Dec. 31. “Dignity thinks that Cigna customers should pay substantially more than what is normal in the region, and we think that’s just wrong.”

Tammy Wilcox, a senior vice president at Dignity, said, “At a time when many nonprofit community hospitals are struggling, Cigna is making billions of dollars in profits each year. Yet Cigna is demanding that it pay local hospitals even less.”

In 2018, the most recent full year for which earnings data is available, Cigna generated an operating income of $3.6 billion on revenue of approximately $48 billion. Dignity Health reported an operating income of $529 million on revenue of $14.2 billion in its 2018 fiscal year.

It’s possible Cigna and Dignity can still reach an agreement. Both sides said they will keep trying, though no talks are scheduled.

If you want to read more about how this turned out,  read the reference (spoiler alert: Cigna backed down)

While the push for universal payer will be uppermost in mind for voters, this type of problem may not go away.






Patients Caught In Crossfire Between Giant Hospital Chain, Large Insurer | California Healthline: