Cigna Plans Specialty Group

March 11, 1994|By Patricia Meisol | Patricia Meisol,Sun Staff Writer

CIGNA HealthCare is negotiating with four physician practices with their own free-standing facilities to provide gastroenterology services to its patients statewide. The specialty network, which would be one of the first in the region, has created a furor among hospital-based doctors who would be excluded and concern among hospital officials.

The Connecticut-based health insurer has notified dozens of hospital-based gastro-intestinal specialists in Maryland that their services will no longer be needed.

The network so far is limited to doctors who treat disorders of the digestive system using endoscopy, in which special scopes are inserted into the body for diagnosis and treatment.

CIGNA, with 96,000 patients, is among the 10 largest managed care companies in the Maryland, Virginia, and Washington, D.C., region.

The free-standing facilities are two to three times cheaper than those at hospitals, largely because of higher overhead carried by hospitals. By law, Maryland hospitals have to charge at least the cost of the service provided -- discounting is banned.

A spokesman for CIGNA in Bloomfield, Conn., said last week that the network is not complete. The insurer otherwise declined to comment on its Maryland operation until after the 1994 legislative session. The spokesman, Mark A. Di Giorgio, said CIGNA doesn't want to be involved in a growing debate over a bill introduced this session to force insurance companies to accept any doctor willing to work for its prices. The bill was proposed by the state's physician group to stop insurers from selective credentialing.

In a Dec. 6 letter to Maryland GIs who treat CIGNA patients, CIGNA said it was "seeking relief from extraordinary facility fees" at hospitals in deciding to negotiate with the four physician practices.

CIGNA also said it expected to sign agreements with selected providers in early 1994 and would provide a 90-day transition period for patients. The agreements apply to CIGNA's HMO and point-of-service programs, the letter indicated, and would mean many GIs would no longer be part of the CIGNA network.

Most insurance companies are looking for less costly practices, but CIGNA "is the first insurance company that has moved so dramatically" to cut off doctors who practice at hospitals and steer patients into independent centers run by a limited group of doctors, said Harold Tucker, a GI in private practice.

That's just the point, said William K. Flanigan, a consultant with W F Corroon's Herget Division in Baltimore. He said employers want less costly ways to provide quality health care service, and doctors will have to change the way they practice if they want to stay in business.

But the specialists' network has drawn fire from doctors who say it doesn't provide for quality or continuity of care.

"They chose completely on the basis of fees. There is no concern to provide a level of comfort to patents who have known their physicians for a long time," said Dr. I. A. Razzak, chief of gastroenterology and director of the Center for Digestive Disorders at GBMC.

He said most of the 25 GI doctors at GBMC have been cut off from CIGNA. Doctors at St. Joseph Hospital and Mercy Hospital

also reported getting notices.

When his hospital tried to address CIGNA's concern over facility fees by matching the rates charged at outpatient centers in a special experiment approved by state regulators, he said, the insurer did not respond.

Dr. Razzak, the president of the Maryland Society of Gastroenterologists, said he asked CIGNA officials to formally announce its plan so that patients signing up or re-enrolling for health insurance in January would be aware that their doctors might not be in the network a few months later. CIGNA refused, he said. As a result, Dr. Razzak said, his four-member practice notified patients themselves.

While doctors are upset about losing patients, hospitals are worried about the network's effect on their revenues.

"If these unregulated centers proliferate the way we think they will, it looks like we would lose 40-50 percent of our [outpatient] business," said John Ellis, vice president for finance and treasurer of St. Joseph Hospital.

He said the hospital estimates it already has lost $500,000 to independent outpatient centers that can discount rates. St. Joseph now earns $45 million or 30 percent of annual revenue from all types of outpatient services.

Nancy M. Fiedler, a spokeswoman for the Maryland Hospital Association, said the growth of such networks will drive up the already existing price discrepancy between independent centers and hospitals as hospitals apportion the cost to treat the poor among a declining pool of paying patients.

As a result hospitals are demanding changes in the regulatory system in Maryland to require the centers to provide some care for the uninsured.

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