Officials confirmed Wednesday that the Private Diagnostic Clinic at Duke University Medical Center and CIGNA Health Care of North Carolina have successfully re-negotiated their service contract. The news nullifies an August announcement that patients in the CIGNA network would be cut off from PDC physicians at the end of 2004 because an agreement could not be ironed out.
Had the contract not been renewed, the PDC--which is, in part, a matching service for patients and physicians--would have left 640,000 North Carolina residents without access to PDC physicians.
At the time, PDC officials cited the rising cost of health care and CIGNA's unwillingness to provide appropriate reimbursement as the impetus for the termination.
"Our original contract with them was 10 years old and at the time the local health care market was in a totally different place," said Dr. Theodore Pappas, executive medical director of PDC. "Any negotiations in 2003 would look very different than in the 1990s."
The new agreement represents some compromise from both sides, said Becky McHenry, director of managed care contracting and reimbursement for the PDC. However, she attributed the success in part to more face-to-face discussions and a new negotiator for CIGNA who grew up in North Carolina.
"This individual probably had a better feel, a better understanding, perhaps, of what Duke and the physicians represent to the employer groups in the area," McHenry said.
Although officials could not reveal the terms of the new contract, Pappas said CIGNA's new reimbursement rates are "right in line with what the other [insurance] companies are providing."
Paul Newman, the PDC's executive director, said in August that CIGNA's reimbursement rates did not cover the cost of providing services and were "markedly lower" than other carriers. He added that if the PDC were to reinstate CIGNA, it would be because of concessions from the insurance company.
CIGNA officials said they were satisfied with the new agreement and were glad their patients could continue to use PDC physicians without interruption.
"I think we had a relationship with Duke in the past," said David Feng, a spokesperson for CIGNA. "All parties wanted to maintain it. We just had to find an agreement that all parties found beneficial."
CIGNA personnel had suggested in August that the contract termination was a negotiation tactic designed to illicit higher reimbursement from the company.
Pappas said he did not know CIGNA's motivation for upping its offers, but he suspected the impending termination was a factor.
"I think they recognized that having Duke and Duke doctors as physicians in their network was a good thing for them and their patients," Pappas said.
The two organizations reached a suitable agreement shortly after the announcement. It was made public about a month ago when the PDC informed its network physicians that CIGNA patients could continue uninterrupted service for the foreseeable future. Pappas did not believe that DUMC had published an official public statement yet.
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