Baton Rouge General at impasse with these insurers over reimbursement rates

Apr. 4—Baton Rouge General officials are working against the clock to keep their physician clinics covered by Aetna and their entire system covered by Cigna, two sizable health insurers in the Louisiana market.

The health system said its hospitals were no longer in network for Aetna as of November, when its contract with the insurer lapsed amid failed negotiations. Now the system's physician clinics are facing a similar dilemma should their contract with Aetna expire April 14 without a new deal in place.

Meanwhile, a deadline for Baton Rouge General's reimbursement contract with Cigna is approaching at the end of May. The two sides have begun negotiations and are communicating at least twice a week, said Baton Rouge General Vice President Don Shaw, who oversees the system's payor contracts.

Central to the negotiations is the reimbursement rates Baton Rouge General is receiving from both insurers. Baton Rouge General officials said they have data showing Aetna and Cigna are reimbursing the health system at rates that are roughly half of what its competitors receive.

"We can see that we're being paid half of what other providers in the area are being paid even when our quality is best," said Meghan Parrish, Baton Rouge General's vice president of marketing and communications.

Cigna had the eighth-highest market share in Louisiana in 2021 with 1.67% of all group health insurance premiums written, according to the latest data from the Louisiana Department of Insurance. Aetna's market share was 1.35%, the 10th best figure in the state.

About 5,000 of Baton Rouge General's Aetna patients could be affected by any potential contract expirations, along with about 2,500 Cigna patients, Parrish said.

"It's disruptive to the patient," Shaw said. "We want to minimize that if at all possible."

In a statement, Aetna called Baton Rouge General a "valued partner" but criticized the health care system for "demanding high double digit increases in reimbursement rates."

"We have a responsibility to members and employers in the Baton Rouge community to negotiate fair reimbursement rates that help keep health care services affordable and accessible," Aetna's statement said. "We remain committed to negotiating in good faith for a fair contract that benefits our members."

Cigna said it would continue to work with Baton Rouge General on a new contract and is hopeful "that we can come to a mutually acceptable resolution."

Baton Rouge General provided some data to The Advocate on its reimbursement rates compared to its competition. For example, the health system said it is paid $14,800 by Cigna for a total hip replacement, compared to $31,000 for an unnamed competitor. For Aetna, Baton Rouge General's hip replacement reimbursement is $15,000, compared to nearly $33,000 for the competitor.

Shaw said Aetna and Cigna have acknowledged a "gap" in its reimbursement rates with Baton Rouge General, but he added that payors tend to discount price transparency info that is now available thanks to tougher federal regulations enacted in 2021.

"We have to be paid fairly because that's the only way that we're able to keep up with inflation," Shaw said.

Shaw said Baton Rouge General's talks with Cigna officials are ongoing. The system is also continuing to negotiate with Aetna to bring its entire system back into Aetna's network.

"We try to keep the door open with all the payors," he said.

This is the second time in a little more than a year that Baton Rouge General's payor negotiations have hit a snag.

In March 2022, Baton Rouge General began warning about 12,000 Humana patients that their care was at risk of being uncovered amid similar reimbursement rate negotiations over the insurer's Medicare Advantage plans. The two sides reached a new deal later that month.

Shaw said Baton Rouge General does not have any other ongoing disputes with insurers.

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