January 2016 CMS blocked marketing and enrollment of Cigna’s Medicare Advantage and Plan D offerings.
The CMS said Cigna plans “posed serious threats to the health and safety of Medicare beneficiaries.” For example, Cigna inappropriately denied medical care and prescription drugs to its members. Cigna and CMS spent more than a year trying to resolve issues with its Medicare Advantage plans.
Insurance industry analysts note that the lifted sanctions pave the way for Cigna to pursue an acquisition in the lucrative Medicare Advantage segment. Any acquisition would likely require divestitures, but it would have been difficult for Cigna to sell its Medicare Advantage business while under sanction. Analysts say Humana is a likely target. Read more in Modern Healthcare
The government told Cigna in a June 16 letter that it could now market Medicare Advantage as well as its Medicare prescription drug plans, which are available to people aged 65 or older and the disabled. Cigna shares rose 1.1 percent to close at $169.07, and Humana was up 0.9 percent at $234.46 on the New York Stock Exchange.
The government imposed the sanctions on Cigna after it found in a 2015 audit that the insurer did not handle complaints and grievances properly from patients who had been denied coverage for health benefits or drugs. It also found problems with Cigna’s handling of its list of covered drugs. The 18-month period is fairly typical for sanctions, which had been levied on competitor Aetna Inc. Read more in Reuters
On Friday, Cigna said it could resume marketing its Advantage-Prescription Drug and Medicare Part D plans with effective dates beginning July 1. The sanctions blocked Cigna from participating in last year’s annual enrollment, the time when those covered by Medicare can change their health plans and prescription drug coverage for the following year.
Cigna said in latest quarterly report that plan enrollment and revenue had been “materially impacted” by the federal government’s decision.
“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. Read more in The Wall Street Journal