After months of negotiations, health insurance company Cigna announced its contract with Dignity Health ended Jan. 1.
The main sticking point was raised rates, Connecticut-based Cigna said in a statement.
“Dignity thinks that Cigna customers should pay substantially more than what is normal in the region, and we think that’s just wrong. Cigna aims to bring Dignity’s rates in line with local markets,” the company explained. “Cigna would very much like to keep Dignity in our network, but not at the excessively high rates that it’s demanding from our clients.”
For Cigna customers, Dignity hospitals and outpatient surgery centers in California are now out of network – including Northridge Hospital Medical Center and Glendale Memorial Hospital. St. John’s Regional Medical Center in Oxnard and St. John’s Pleasant Valley Hospital in Camarillo also are affected by the failed negotiations.
Starting Feb. 1, Dignity-affiliated open access and preferred provider doctors groups will be out of network for Cigna customers, and HMO medical groups beginning April 1.
“At a time when many nonprofit community hospitals are struggling, Cigna is making billions of dollars in profits each year,” Tammy Wilcox, vice president of payer strategy and relationships at Dignity Health, said in a statement. “Yet Cigna is demanding that it pay local hospitals even less. These reductions would challenge the financial stability of nonprofit hospitals and impair our ability to keep health care services available to the communities we serve.”