Dive Brief:
- Last week, Cigna revealed CMS has suspended further enrollment into its Medicare Advantage and Standalone Prescription Drug Plan Contracts, as well as marketing of the plans to new customers.
- The sanctions became effective at 11:59 p.m. on January 21 and were due to reported deficiencies regarding Cigna's appeals and grievances processes, Part D formulary and benefit administration, and compliance issues.
- The impact may be limited, however, considering Cigna's variety of business and the annual Medicare open-enrollment period has already concluded, as the Wall Street Journal notes.
Dive Insight:
The sanction comes as Cigna pursues a deal to be acquired by Anthem amid high scrutiny by federal and state regulators working under the DOJ.
Anthem stated the company remains "committed to the deal” and Cigna said it was "working to resolve these matters as quickly as possible and is cooperating fully with CMS on its review."
As the Journal notes, other insurers have come through after overcoming similar sanctions, including Aetna, which lost about 10% of its Medicare Advantage membership, and Health Net, which lost about 8% of its Advantage membership, both between 2010 and 2011.
Experts say the main factor in whether Cigna will suffer significant losses is whether the suspension continues into the fall 2016 enrollment period.
Meanwhile, the action from CMS comes as the agency takes heat from former administrator Marilyn Tavenner regarding a new analysis that finds CMS is underpaying Medicare Advantage insurers for patients managing multiple chronic conditions, as Modern Healthcare reports.