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St. Francis might be kicked out of Sagamore

May 6, 2008
In a story rich with irony, Cigna HealthCare is threatening to kick the St. Francis hospital chain out of Sagamore Health Network, the very managed care network that Cigna bought last year from St. Francis and other hospital groups.

The dispute comes after health insurance giant Cigna and Sagamore failed to negotiate a new reimbursement contract with St. Francis.

St. Francis announced yesterday that Cigna and Sagamore have notified St. Francis that its hospitals no longer will be part of the Sagamore network as of June 15.

In Indianapolis, the conflict is even more ironic because St. Francis' chief contract negotiator is Greg Yust, who was CEO of Sagamore Health Network until January. He joined St. Francis in March.

St. Francis, which owns and operates 13 hospitals in Indiana and Illinois, is owned and operated by the Sisters of St. Francis Health Services. Sisters of St. Francis is based in the northern Indiana city of Mishawaka.

St. Francis is the fourth-largest hospital system in the Indianapolis area, with locations in Beech Grove, Indianapolis, Mooresville and Plainfield.

Sagamore Health Network negotiates discounted reimbursement rates with doctors, hospitals and other medical centers. It then sells access to that network of provider discounts to employers or health insurers.

St. Francis owned part of Sagamore, along with co-owners St. Vincent Health in Indianapolis, St. Joseph Regional Medical Center in South Bend and St. Mary's Health System in Evansville.

When announced in August, terms of Cigna's acquisition were not disclosed. However, a Cigna official said the acquisition would add $15 million to $20 million of revenue per year.

Cigna HealthCare is a subsidiary of Philadelphia-based Cigna Corp.

Cigna officials were not immediately available for comment.

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