FAHC and CIGNA resume health insurance negotiations

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(Host) Fletcher Allen Health Care and the CIGNA health insurance company are trying to resolve a contract dispute that threatens to leave thousands of people without coverage at the state’s largest hospital. The two sides began talking again after Governor Jim Douglas urged them to break the contract deadlock.

VPR’s John Dillon reports:

(Dillon) If Fletcher Allen Health Care breaks its relationship with CIGNA health insurance company, 85,000 people could be forced to cover their own hospital bills.

After Fletcher Allen announced its decision on Thursday, Governor Jim Douglas got on the phone with both sides and urged them to re-open negotiations. Administration Secretary Michael Smith says the impasse is not acceptable for the thousands of state employees and others covered by CIGNA.

(Smith) “Brinksmanship in this case is not a viable option. So those two entities need to get back to the table and work things out. It’s my understanding that they may in fact be getting back together and trying to work things out. But the bottom line is, they need to work things out.”

(Host) Fletcher Allen spokesman Mike Noble says the two sides are negotiating again. He says the payments CIGNA and the hospital negotiated for the current contract don’t cover the hospital’s cost of care. He says hospital administrators now regret signing that contract, which allowed them to reopen negotiations with CIGNA.

(Noble) “We did sign that contract and in hindsight we wished we hadn’t. When we looked at an analysis of how it was going, we found that the levels were unsustainable. And we need to work out an agreement where we can do that, where we can have reimbursement that’s fair to both parties.”

(Dillon) Fletcher Allen is in the middle of an expensive expansion plan known as the Renaissance Project. Jeanne Keller, a health care watchdog, says patients and health insurance companies are starting to see the bill for the $362 million project.

(Keller) “If CIGNA’s saying they’re trying to raise basically twice as much from CIGNA as they used to, then it sounds to me that there’s a heck of a rate shock. And yes, a lot of this has to do with Renaissance.”

(Dillon) But Noble from Fletcher Allen says the current contract impasse is not related to the new construction project. He says the hospital just needs more money to cover its costs.

For Vermont Public Radio, I’m John Dillon.

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