Cigna HealthCare of Florida has eliminated 19 hospitals from its HMO network and added 28 hospitals, including 21 owned by Columbia/HCA Healthcare Corp.
The move marks one of the boldest provider contracting shifts by a managed-care plan in the state.
The hospitals eliminated by Cig-na compete directly with Columbia facilities. Eleven of the 19 hospitals excluded from Cigna's HMO network are not-for-profit institutions, and eight are investor-owned. The changes become effective May 1.
For example, two-hospital Lee Memorial Health System in Fort Myers was excluded from Cigna's HMO network, while three of Columbia's hospitals in Lee County were added. The public hospital system expects to lose about $6 million in annual revenues from the Cigna contract, a spokesman said.
Cigna operates Florida's third-largest managed-care organization with 400,000 enrollees in its HMO and PPO service lines. Columbia owns 60 hospitals in Florida, or 29% of the state's 208 acute-care facilities.
Managed-care experts said the 30% turnover of hospitals in Cigna's HMO network represents the largest shift of providers in Florida, but Cigna's decision is a sign of things to come. There are now 75 hospitals in Cigna's HMO network in the Tampa-St. Petersburg, Miami-Fort Lauderdale and Fort Myers areas.
A Cigna official said there were no changes made in Orlando and Jacksonville, the company's other two main HMO markets. Statewide, Cigna has about 100 hospitals under contract in its HMO and PPO networks.
In Plant City, Cigna initially removed 100-bed South Florida Baptist Hospital from its HMO network. However, Cigna reversed its decision after politicians and business leaders from Hillsborough County and Plant City applied pressure on behalf of their 1,000 employees who use Cigna's HMO.
"We were originally notified we weren't needed because of the statewide deal with Columbia," said William Anderson, South Florida's president and chief executive officer. "Cigna felt they could service their enrollees from Brandon Hospital (a Columbia facility 12 miles south of Plant City)."
Anderson said primary-care physicians also told Cigna they would drop out of the HMO network if South Florida was eliminated. "It was a combination of things that got (Cigna's) attention," he said.
In letters to physicians, Cigna cited five reasons for shaking up its HMO network. Depending on the market, Cigna said, the factors involved quality of care, range of clinical services, geographic position, price and commitment to providing managed-care data.
"This strategy will increase our competitiveness," said Betty Kimmel, Cigna's Florida president and general manager. "Our aim is to maximize quality of care for our enrollees and maximize the value...to employers."
Kimmel said it is a coincidence that Columbia hospitals figure so prominently in Cigna's revamped HMO network.
"We didn't sign a statewide exclusive contract with Columbia," she said. "We looked at each hospital on a market-by-market basis."
Cigna also doesn't expect to save money or add enrollees through the new contracts, Kimmel said.
It will, however, be able to reduce medical costs for the self-insured companies with which it provides administrative services, she said.
Cigna also recently signed national contracts with SmithKline Beecham Clinical Laboratories for reference laboratory services and Olsten Kimberly QualityCare for home-care services.
The three-year deal with Olsten will include a fixed per enrollee price for clinical nursing services, infusion therapy and durable home medical equipment. An Olsten official said the deal is worth about $80 million a year in revenues.