Health care is a dynamic landscape where insurers, hospitals, health systems, providers, and other stakeholders must work together to drive access to affordable and quality care for individuals and communities.

One way health insurers support this goal is by establishing contracts with health systems, hospitals, physicians, and other ancillary providers (i.e., labs, radiology centers, medical equipment companies, etc.) to build medical provider networks for their members. A “provider network” is a group of health care practitioners and/or facilities who have agreed to offer their services at pre-negotiated rates. Being “in-network” means a provider has a contract with the insurer, which typically results in lower out-of-pocket costs, quality care, and greater access to care for patients.

Insurers work together with hospitals and health systems to negotiate these contracts every few years. These negotiations focus on a range of elements, including how much the insurer pays the provider based on the services and quality of care they provide. There are two primary types of payment models: fee-for-service, where the provider is reimbursed for each service provided, and value-based care, where the provider is reimbursed based on the outcomes their patients achieve.

At Cigna Healthcare, we value our relationships with hospitals, health systems and providers, and we recognize they are essential partners in delivering care. Our goal in every negotiation is to reach a fair agreement that reimburses providers at competitive market rates and protects health plan members’ access to affordable and quality care.

Let’s look at why medical networks are necessary, why health plans and providers negotiate every few years, and what that means for the people they serve.

What are the benefits of a medical provider network?

When patients need care, choosing an in-network provider means their insurer has already negotiated the cost of that care as part of the contract. Patients save money by using in-network providers because of the insurer’s work to negotiate sustainable pricing with providers.

Patients also benefit from other aspects of the in-network agreement, including a simplified administrative experience, since in-network providers submit claims directly to the insurer on the patient’s behalf. On the flip side, when a patient sees an out-of-network provider, they typically need to submit the claim to their insurance company on their own. Additionally, by staying in-network, patients also benefit from greater coordination of care and access to a trusted network of providers. And, if your provider participates in a value-based care agreement with your health plan, you may benefit from more coordinated and data-driven care, quality outcomes, and cost savings.

What is Cigna Healthcare’s approach to provider negotiations?

We approach provider negotiations with a strong focus on data-driven decision-making, collaborative partnerships with providers, and delivering meaningful value to customers and our employer clients who offer their employees benefits.

Every network-building negotiation is guided by data as our teams rely on market data and insights to identify where our costs are competitive and to find opportunities for improvement. In addition, we work closely with hospitals and physicians to build contracts that reflect thoughtful payment structures and policies, helping manage medical costs while supporting quality care and positive health outcomes. Most of Cigna Healthcare’s business with health systems is through employer-sponsored plans that are self-funded. That means the actual cost of health care services is directly paid by employers, their employees, and their families through payroll deductions – while the health plan manages the administrative tasks. When the cost of care goes up, employers and customers ultimately pay more. This is why we are dedicated to advocating on behalf of our clients and customers to ensure we negotiate fair and equitable contracts.

We view providers as partners and strive to foster collaboration that fairly reimburses them for the quality care they offer, while supporting employers and improving care for the people we collectively serve.

How often do hospitals or doctors leave the Cigna Healthcare network?

Hospitals and doctors rarely leave the Cigna Healthcare network and most of our agreements are resolved without any disruption to care.

In an average year, 99.6% of hospitals remain in our network without a break in participation, and 99.9% remain in-network or return within one year.* Additionally, we closely monitor network adequacy and composition to ensure patients still have access to care even if a system leaves the network.

Why are these negotiations getting more attention and taking longer to come to an agreement?

Across the industry, factors like rising costs, inflation, technological innovation, labor shortages, government funding, and evolving care models all play a role in providers seeking significant rate increases. As a result, negotiations have become more complex, taking more time to resolve, and becoming more public (especially with the advent of social media). In fact, at least 90 contract disputes between health insurers and providers have played out in public so far this year, according to FTI Consulting, which tracks the disputes. That’s compared with 51 public disputes in 2022, 86 in 2023, and 133 in 2024.

What happens if an agreement is not reached by the contract’s expiration date?

If an agreement isn’t reached by a contract’s expiration date, a provider may become out-of-network, though this is usually temporary. We recognize this can be frustrating and confusing for patients.

In the few instances a provider no longer participates in the network, there are safeguards and support in place to minimize disruptions to care and help customers find alternative options, including:  

• Continuity of care: If you are in active treatment, your insurer may allow you to continue seeing your provider at in-network rates for a set period.
• Transition support: Your insurer can help you find quality in-network alternatives nearby.
• Clear communication: Expect timely updates and personalized support.

Our commitment to you

Provider networks and the negotiations to establish them play a vital role in ensuring fair reimbursement for care that is reflective of current market conditions while keeping health coverage affordable for individuals, families, employers, and communities. These agreements help build strong provider networks that support access to quality, cost-effective care.

We understand that contract negotiations between health plans and providers can feel frustrating for everyone. We’re committed to keeping our customers informed and supporting their continuity of care.

Our goal is to collaborate with providers in a way that promotes access, transparency, and better health outcomes through a stable and reliable medical network. When negotiations are successful, more providers join our network – making it easier and more affordable for our customers to get the care they need.