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Insurance giant Cigna to drop Memorial Hermann from network due to ‘unaffordable rates’

HOUSTON – Health insurance giant Cigna announced Tuesday that it will end its contract with the Memorial Hermann Hospital system starting in March of 2020. Nearly 1500 doctors will reportedly be dropped from the network and tens of thousands of patients will be impacted.

Beginning March 16, people insured by Cigna under their employer, receiving medical care at Memorial Hermann will have to find an alternative health care provider or risk what could be very hefty out of network charges to continue care at one of its hospitals.

“People always want a villain and it’s very hard to figure out who the villain is here,” said University of Hosuton law professor Seth Chandler. “Cigna is out to make money. Memorial Hermann, they’re out to make money too.”

What Cigna is saying

Cigna told Memorial Hermann it will end its commercial contract, effective March 16, 2020, citing the hospital system’s refusal to negotiate rates that would keep health care affordable for Cigna customers.

Earlier this year, Memorial Hermann unilaterally raised the list price of services, making it much more expensive for Cigna customers to get care from Memorial Hermann hospitals, doctors and facilities. Since then, Memorial Hermann refused to engage in meaningful negotiations with Cigna that would bring rates for Cigna customers in line with what the hospital system charges other customers, according to the insurance company.

"We are committed to providing our customers with access to affordable, quality care," said James Hickey, president of Cigna's South Texas market. "Unfortunately, Memorial Hermann thinks that Cigna customers should pay more than anyone else, and we think that's just wrong."

Hickey also says that health care is purchased and used locally so the rates charged for care should reflect local costs and should be competitive with market rates.

“The problem is price. We would very much like to keep Memorial Hermann in our network, but not at the excessively high rates that it’s expecting our customers to pay,” Hickey 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. Cigna customer service representatives can help with those arrangements. Cigna’s action does not affect its Medicare Advantage plans.

Customers can access Cigna’s provider directory online at myCigna.com or by using the myCigna mobile app.

What Memorial Hermann says

The hospital system issued a statement Tuesday morning:

“Memorial Hermann is committed to serving the needs and best interests of our community. Advocating for our patients’ health, from access to resources to lower costs of care, requires support and engagement from many stakeholders-hospitals, employers, insurance companies and more. Unfortunately, Cigna has been unwilling to meaningfully engage with Memorial Hermann in the creation of value-based programs as an effort to collectively lower costs for patients across our service area. While it is unfortunate that we have been unable to find common ground in this longstanding partnership to provide Houston employers and customers with competitive plans and rates, as always, we remain committed to maintain a cost of care that is line with the market and our community. Our goal is to make Houston a healthier place to live today and for generations to come. We remain open and ready to work with willing partners in this effort.”


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