Contract Dispute Between Legacy Health and Cigna Threatens Patient Coverage
Legacy Health patients with Cigna commercial insurance face the possibility of losing in-network access to most Legacy facilities if a new agreement isn’t reached by June 30. The contract dispute centers on reimbursement rates, with Legacy arguing that Cigna’s payments haven’t kept pace with rising operational costs, including inflation, labor, and supply expenses.
The standoff reflects a broader trend of tense negotiations between insurers and healthcare providers. Similar disputes have affected other healthcare systems in Oregon, such as OHSU’s near-miss with UnitedHealthcare in March and Providence Health & Services Oregon’s contract termination with Aetna earlier this year.
Without a new deal, Legacy clinics and urgent care centers across the Portland metro area may stop accepting most Cigna insurance, forcing patients to pay higher out-of-network costs or seek care elsewhere. The potential contract breakdown would primarily affect Cigna members who receive insurance through their employers and receive care at major Legacy facilities, including Legacy Emanuel Medical Center and Legacy Good Samaritan Medical Center.
Key Facilities and Services Affected:
- Legacy Emanuel Medical Center
- Legacy Good Samaritan Medical Center
- Legacy Mt. Hood Medical Center
- Legacy Meridian Park Medical Center
However, not all Legacy facilities will be impacted. Legacy Silverton Medical Center and clinics in Silverton, Molalla, Keizer, Mt. Angel, and Woodburn operate under a separate agreement with Cigna and will remain in-network. Medicare Advantage patients covered by Cigna are also unaffected due to separate contracts.
Legacy treats approximately 20,000 patients with Cigna commercial plans annually. The health system argues that it needs higher reimbursement rates from insurers to offset rising care delivery costs, which have increased by 35% since 2022 due to higher supply and labor expenses.
“For years, our reimbursement from Cigna has not kept pace with these rising costs, while Cigna has reported billions of dollars in profits every year,” Legacy stated. Cigna counters that it must balance its responsibility to keep healthcare affordable for its customers. The insurer notes that most of its business with Legacy is through self-funded employer plans, where costs are directly borne by employers and employees.
Cigna has set up an informational website acknowledging the financial challenges hospitals face while emphasizing that increased care costs ultimately affect employers and customers. Patients admitted to the hospital before the contract expires may continue to receive in-network care after July 1 if their hospital stay is approved.
The situation highlights the complex negotiations between healthcare providers and insurers, with patient care hanging in the balance.
