St. Francis Hospital, CIGNA HealthCare contract negotiations at impasse

INDIANAPOLIS – St. Francis Hospital & Health Centers and insurance company CIGNA HealthCare, who owns both CIGNA and Sagamore Health Network employer health-benefit products, have reached an impasse in contract re-negotiations.

CIGNA has issued a termination notice to St. Francis and the other 12 hospitals owned and operated by the Sisters of St. Francis Health Services, Inc. (SSFHS) system for all CIGNA and Sagamore networks and products, effective June 15, 2008.

“The contracts between CIGNA/Sagamore and the Sisters of St. Francis have been in place for many years dating back as far as 1995,” said Greg Yust, vice president of managed care contracting for SSFHS. “The decision by CIGNA/Sagamore to terminate the agreement with St. Francis and the Sisters of St. Francis organization was entirely unexpected. This will cause significant disruption for employer groups and payers who anticipated having access to SSFHS facilities for their 2008 health plan benefit year.”

CIGNA notified SSFHS that all its medical facilities and affiliates in Indiana and Illinois would be terminated from participation in Sagamore Health Network and CIGNA networks and products effective June 15, 2008. The timing of the action could create significant disruption for employer groups because most group health benefit plans run on a calendar-year basis, according to Yust.

St. Francis and SSFHS are willing to honor the existing agreements with CIGNA/Sagamore through Dec. 31, 2008, or the employers’ next benefit renewal cycle. This would eliminate the significant disruption at June 15th termination will cause for employers and their employees.

“St. Francis Hospital & Health Centers will do everything possible to ensure that employers and patients who want continued access to the high-quality, cost-effective care provided can do so,” said Robert J. Brody, St. Francis’ president and chief executive officer.