Cigna Re-enters Medicare Advantage Market With CMS Approval
Cigna gains CMS approval to re-enter the Medicare Advantage (MA) market after being suspended in 2016 for systemic failures which impacted care and medication access
Source: Thinkstock
By - Cigna announced in a securities filing that it had received the green light from CMS to begin offering Medicare Advantage plans again after an 18 month suspension.
The insurer had been banned from offering the popular Medicare supplement products since January 2016 for noncompliance which posed a “serious threat to enrollees’ health and safety,” according to the CMS enforcement filing.
The insurer will be able to start offering MA plans immediately. The company also stated that based on the final Medicare Star Ratings for the 2018 payment year, it expects approximately 60 percent of its Medicare Advantage customers to be in a 4 Star or greater plan.
“We are a better and stronger company as a result of collaborating with CMS and investing further in our processes and technology over the past year and half,” said Shawn Morris, interim president for Cigna-HealthSpring in a statement from the insurer.
“As a company that puts customers first, we look forward to continuing that partnership while delivering high-quality health care plans to both existing and new customers.”
After a routine CMS audit in 2016, Cigna was cited for improperly handling complaints by members who had been denied healthcare or prescription drug coverage.
The audit revealed “widespread and systemic failures,” such as incorrectly classifying complaints by members. This lack of infrastructure resulted in delayed appeals and claim determinations, often in cases with time sensitive medical requirements. Access to these services and prescriptions is a fundamental requirement of Medicare Part C and D.
The CMS report determined that Cigna’s “lack of a compliance infrastructure, coupled with serious deficiencies of Cigna’s administration of the Medicare Parts C and D requirements, resulted in enrollees being denied access to the medical services and drugs that they are entitled to receive.”
In a 2015 meeting between Cigna’s senior leadership and CMS, the payer admitted that there were internal roadblocks to integrating its operations. The CMS enforcement report concluded that this had led directly to Cigna’s inability “to adequately monitor and oversee whether it is in compliance with the Medicare Parts C and D requirements and has resulted in substantial failures that require considerable correction in order for Cigna to return to a state of compliance with CMS.”
A return to the Medicare Advantage market is a financial bonus for the insurer. Medicare Advantage plans have been profit centers for the payers who offer them. A 2017 CMS report described expected revenue increases for the Medicare Advantage (MA) program and Part D Prescription Drug Program. This included an expected 0.45 percent increase in revenues for payers with a potential 2.95 percent growth in overall revenue.
