Many Dignity hospitals might no longer be taking this insurance in 2020

Dignity Healthcare hospitals across California — including Mercy Medical Center in Redding — will stop taking Cigna insurance for most services in the new year if rate negotiations don't work out between the insurer and healthcare company, both confirmed Friday.

A statement from Cigna said, depending on how rate negotiations pan out, it would be pulling out of Dignity hospitals throughout California for all services in the new year, except for in a few that offer Cigna's "LocalPlus" insurance. Those hospitals are in El Dorado, Placer, Sacramento, Santa Cruz, Sutter and Yolo counties.

In Redding, the impact could hit hardest for families, since Mercy offers non-emergency pediatric services that aren't available at the other main hospital in town, Shasta Regional Medical Center. Cigna said it was "confident that we have sufficient coverage for pediatric care in the Redding area," though. 

Still, at least one local doctor is concerned about what the change would bring. 

"They have these people paying lots of money to have health insurance through Cigna, and they’re being told their pediatrician is invalid through the office because they are having a trade dispute with Mercy?" Dr. Lloyd Braemer, a Redding pediatrician who has hospital privileges with Mercy and was told his Cigna contract would end, said of his patients. "That doesn't seem fair." 

Cigna logo of a person-graphic as the trunk of a tree with green leaves.

The clash over reimbursement rates comes after Mercy's merger with Catholic Healthcare Initiatives — and an ensuing agreement supervised by the California Department of Justice making the company's hospitals "preserve the accessibility and availability of healthcare services" in spite of cost-cutting efforts. 

Both companies said certain patients might still be able to get some services at in-network prices, but it's not clear the extent to which that might happen. 

Dignity deferred to Cigna for information on exemptions, other than the following:  

"If a Dignity Health doctor or hospital is the only one in the area that provides a specific service, the patient or the primary care physician will need to contact Cigna to determine if Cigna will authorize the patient to go to Dignity Health for the service. Depending on the benefit plan, Cigna may authorize the service without additional cost or may require the patient to use out-of-network benefits and reimburse accordingly."

Mark Slitt, a spokesperson for Cigna, said any possible in-network exemptions would only happen for "a specified time" after Jan. 1. Generally speaking, conditions that would qualify include pregnancy, trauma, follow-up to a recent major surgery and acute problems like heart attacks, he said. Slitt said patients should call 1-800-244-6224 to find out whether they'd be eligible for any ongoing coverage. 

Dignity and Cigna essentially blame each other for the possible loss of coverage. 

In a statement to the Record Searchlight, Dignity said that it's "been unable to reach acceptable terms" with Cigna. 

"In the absence of new agreements, the majority of Dignity Health providers will be out-of-network for Cigna members beginning on Jan. 1," the statement reads. "We will continue to negotiate with Cigna and hope to be able to reach agreement." 

Cigna took it a step further by saying Dignity was "just wrong" for "refusing to negotiate rates that would keep health care affordable for Cigna customers." 

"The problem is price," Slitt said in an email to the Record Searchlight. "Dignity thinks that Cigna customers should pay substantially more than what is normal in the region, and we think that's just wrong." 

Mercy Medical Center of Redding

Braemer shared a letter with the Record Searchlight from Cigna saying he'd have to get hospital privileges somewhere other than Mercy if he wanted to keep getting reimbursed by the insurer.

Since Braemer works out of his own office and only admits patients to Mercy if their condition is serious enough, he said he doesn't understand why Cigna's possible departure would even apply to practices like his. 

"(Patients') children are more important to them than anything," said Marsha Ham, officer manager at Braemer's practice. "It doesn’t just impact us; it impacts our families."

Braemer said Shasta Regional doesn't offer non-emergency pediatric services the way Mercy does.

A Cigna patient himself, Braemer said if the company pulls out from Mercy, he plans on getting flight insurance so he wouldn't be billed thousands of dollars for a helicopter ride to a hospital that takes Cigna if Shasta Regional doesn't offer what he would need. 

A Shasta Regional spokesperson didn't return a message Friday asking for information about its pediatric hospital services. 

"Some people may have … the means to be able to switch insurances, but I think in today's’ times," Ham said, "that is not an easy thing to do."

Alayna Shulman covers a little bit of everything for the Record Searchlight. In particular, she loves writing about the issues of this community through long-form storytelling. Her work often centers on local crime, features and politics, and has won awards for best writing, best business coverage and best investigative reporting in the California News Publishers Association's Better Newspapers Contest. Follow her on Twitter (@ashulman_RS), call her at 530-225-8372 and, to support her work, please subscribe