- Herb Fritch, 66, president and founder of Cigna's arm for Medicare Advantage plans Cigna-HealthSpring has announced a retirement date of November 11.
- HealthSpring, based in Nashville, Tennessee, was purchased by Cigna in 2012 for $3.8 billion.
- At the time, HealthSpring had 340,000 MA customers, and it grew to 533,000 MA customers as of June 2016, the Hartford Courant reports.
Cigna's acquisition of HealthSpring was a significant development in the Medicare Advantage landscape because it helped the company become one of the largest MA plans in the country. In 2016, Cigna and five other health insurance companies accounted for 73% of the MA market, according to the Kaiser Family Foundation.
However, it hasn't been all smooth sailing for the company. It revealed in January that it was hit with sanctions by CMS that blocked further enrollment in its MA and Standalone Prescription Drug Plan contracts, as well as marketing of the plans to new customers. The sanctions came as a result of reported deficiencies around Cigna's appeals and grievances processes, its Part D formulary and benefit administration, and compliance issues.
Cigna disclosed just last month that it will not be able to resolve the investigations into the reported deficiencies in time to participate in the upcoming MA annual enrollment that begins Oct. 15. Though analysts did not appear highly concerned, at least one had lowered his 2017 revenue projections for Cigna as a result. Cigna has not stated projections for how the sanctions may impact 2017 revenue.
Fritch will be eligible for an estimated retirement payout of $21,342,675, according to a company filing.