CIGNA contract

 The Private Diagnostic Clinic at the Medical Center announced Friday it will no longer accept CIGNA Healthcare as of Jan. 1, 2005.

 The decision to terminate the agreement when the contract expires may leave 640,000 North Carolinians without access to PDC physicians if a new agreement is not reached in time. PDC officials cited rising health care costs without a corresponding rise in CIGNA's contribution as the reason for discontinuing their official relationship with the company.

 "Under the terms of the current agreement, payments to the PDC have remained substantially below the cost of providing services needed by CIGNA members and well below reimbursement levels from similar insurers," said Paul Newman, PDC's executive director. "PDC has not received a rate increase in several years." He added that CIGNA's current payment levels are "markedly lower" than other carriers.

 CIGNA and PDC, which acts primarily to match doctors and patients, have been involved in 18 months of negotiations over reimbursement that continued even until last week.

 "This development was unexpected from our point of view because we had been reviewing our proposals, negotiating in good faith with the goal of maintaining the group's uninterrupted participation," said David Feng, a spokesperson for CIGNA.

 If the termination takes effect, CIGNA HMO patients will receive no reimbursement for care at any PDC clinics. Other branches of CIGNA will still have access to Duke PDC physicians but will have higher out-of-pocket expenses.

 More than 800 PDC physicians practice out of Duke Hospital and more than four dozen clinics throughout Duke and North Carolina. However, the change will not affect CIGNA's contracts with DUMC hospitals, which will still accept CIGNA as before. It will, however, impact the insurer's business indirectly, Newman said. "It's PDC physicians for the most part who are putting patients into Duke Hospital," he said. "Even though they have a contract with those other hospitals it's difficult to maintain those contracts when no patients are coming through."

 PDC officials said they are concerned primarily for the patients affected by this change.

 "The Private Diagnostic Clinic is announcing this contract termination at this time--16 months before termination--to ensure that patients served by the PDC will have ample time to select other health plans that will give them continued access to their Duke physicians," said Dr. Theodore Pappas, executive medical director of PDC.

 Some at CIGNA have speculated the announcement is meant as a negotiation tactic and the termination will not ultimately take effect. Feng said CIGNA hopes to reopen negotiations with the PDC this week and underscored the tentative nature of the announcement. "At this time there is absolutely no disruption of coverage through the Duke Private Diagnostic Clinic," he said. "We hope to overcome this development." Newman said the PDC was open to continued discussion. "Things could happen between now and then," he said, "but it really is up to CIGNA."