Health insurance contracts with hospitals and other health care providers can have a major impact on workers and patients throughout Texas. Two major companies, Cigna Corporation and Memorial Hermann Health System, have extended one existing contract while continuing negotiations over how the health system’s claims will be handled by the insurance company. The contract between the companies was scheduled to end on March 15, making Memorial Hermann hospitals out-of-network for most commercial Cigna customers. This means that it would be far more expensive for patients to receive care at these hospitals, which may push many to choose other options whenever possible.
The date of the contract end has been moved forward to April 30 as negotiations proceed between the companies. The firms issued a joint statement about their contract negotiations, saying that they aim to provide “access to quality care at an affordable costs.” The initial dispute between the parties arose over costs, according to statements from Cigna at the time the insurance company announced the contract termination. There are 1,460 doctors affiliated with Memorial Hermann, which runs 4,178 hospital beds in the Houston area. There are approximately 178,000 Cigna customers who would be affected by the contract termination. Cigna is the sixth-largest health insurer in Texas.
This is not the only contract dispute in the health care industry. UnitedHealth Group, the second-largest insurer in Texas and the largest in the country, ended its in-network contract with Houston Methodist in a similar dispute over pricing. Up to 100,000 plan members were affected by the termination of that contract on Dec. 31, 2019.
Contract disputes can have a serious impact not only on the businesses directly involved but on their employees, customers and communities. A business law attorney may work with a company to aim to prevent disputes and resolve issues before litigation becomes necessary.