Dive Brief:
- Cigna, which has been under sanctions by CMS since January requiring it to suspend enrollment in Medicare Advantage and Part D plans, will not be able to resolve the investigations in time to participate in the upcoming annual enrollment beginning Oct. 15, the company disclosed in a regulatory filing Tuesday.
- The issue stemmed from CMS' finding of “widespread and systemic failures” in Cigna’s MA business, including deficiencies in its appeals and grievances processes, Part D formulary and benefit administration.
- The resulting federal probe did not disturb Cigna's participation in last year's Medicare enrollment period as it concluded by the time the sanctions were imposed, but the impact of missing this year's enrollment remains to be seen.
Dive Insight:
The question of the impact to Cigna's MA business comes as the company also looks toward an uncertain and reportedly somewhat soured acquisition by Anthem, as the pair await a trial brought on by the DOJ over the proposed merger slated to begin November 21.
Much will be determined by how long into 2017 the sanctions will remain, though other Medicare plans facing sanctions have needed about a year to dig out, according to Modern Healthcare.
Analysts do not appear to be worried. Cigna also stated that it expects to reaffirm its projected full-year 2016 adjusted income from operations to the range of $2.02 billion to $2.11 billion, and shares for the company dipped less than 1% Tuesday morning to $127.79.
On the flip side, Cigna has previously indicated it has already spent $30 million in its efforts to rectify its issues, and an analyst at Susquehanna Financial Group told Modern Healthcare he lowered his 2017 revenue projections, dropping Cigna by $362 million.