Hundreds of thousands of Houstonians could be forced to switch hospitals — or pay higher, out-of-network costs — if contract negotiations remain contentious between two health insurance giants and two of the largest hospital systems in the region.
A spokesperson for Connecticut-based insurer Cigna said it has told Memorial Hermann Health System it will terminate their contract on March 16, 2020, because of a dispute about costs for medical care. Memorial Hermann is the largest not-for-profit health system in Texas and has 13 hospitals in the Houston area, including Memorial Hermann Greater Heights Hospital at 1635 N Loop W.
A spokesperson for Houston Methodist Hospital said UnitedHealthcare, the world’s largest healthcare company in terms of revenue, has said it plans to terminate their contract at the end of this year. The insurance company has had a similar dispute with Houston Methodist, which has seven hospitals in the region.
“Negotiations are still underway, but with little progress,” Houston Methodist spokesperson Stefanie Asin said in a Dec. 21 email.
If an agreement is not reached, the Houston Chronicle reported that as many as 100,000 people with employer-sponsored plans with UnitedHealthcare would have Houston Methodist removed from their list of in-network medical providers. Asin said physicians employed by the hospital would be dropped from the network on April 1. Seniors in the insurance company’s Medicare Advantage programs also would be affected.
As many as 178,000 people with employer-sponsored Cigna plans would have the Memorial Hermann system removed from their in-network list of providers if that contract dispute is not resolved, according to the Chronicle. Although seniors covered under Cigna’s Medicare Advantage program would not be affected.
Cigna spokesperson Brian Henry said in a Dec. 21 email that Memorial Hermann raised its prices for Cigna customers earlier this year and has refused to lower its rates to be in line with what the hospital system charges other customers. If Cigna ends up dropping Memorial Hermann from its network, Henry said “Cigna customers receiving ongoing care for certain conditions may be able to continue their care at Memorial Hermann at the in-network benefit level for a set period of time under their plan’s continuity of care guidelines.”
“We would very much like to keep Memorial Hermann in our network,” Henry added, “but not at the excessively high rates that it’s expecting our customers to pay.”
Memorial Hermann told Houston TV station ABC13 that Cigna has been unwilling to budge in their negotiations, refusing to entertain the hospital’s offer to create a value-based reimbursement program that would effectively lower healthcare costs.
“Our goal is to make Houston a healthier place to live today and for generations to come,” Memorial Hermann told the station. “We remain open and ready to work with willing partners in this effort.”