Talks are progressing between CIGNA HealthCare and Sisters of St. Francis hospitals ahead of a Sunday deadline for terminating the insurance company's contract with the hospital system.

Both sides exchanged proposals late last week, said Mike Allen, regional director of managed care for Sisters of St. Francis.

"The parties have continued talking and continued to negotiate in good faith," Allen said.

CIGNA in February set a mid-June deadline for terminating Sisters of St. Francis Health Services' medical facilities and affiliates in Indiana and Illinois from participation in Sagamore Health Network and CIGNA network if no agreement was reached.

Sisters of St. Francis operates St. Margaret Mercy Healthcare Centers in Hammond and Dyer; St. Anthony Medical Center in Crown Point; St. Anthony Memorial in Michigan City and Franciscan Physicians Hospital in Munster, along with other hospitals in Indiana and Illinois.

CIGNA provides coverage locally for smaller employee groups, often with fewer than 100 employees.

Terminating the contract could affect several thousand area residents, who would have the option of going out-of-network for health care at Sisters of St. Francis facilities, unless their employers changed networks, Allen said earlier.

Top issues in the discussion have been reimbursement levels and methodology, Allen said.

"We're trying to get down to the final points," he said. "There've been several issues, but the list is a lot shorter than when we talked a month ago."

Connecticut-based CIGNA said the company remains actively engaged in discussions with Sisters of St. Francis "to reach a mutually agreeable contract resolution," before Sunday, CIGNA said in a prepared release.