CMS lifts sanctions on Cigna's Medicare plans

Until Friday, Cigna had been banned from both marketing and enrolling people in MA and Part D plans since January 2016. (Getty/zimmytws)

Nearly a year and a half after it was hit with government sanctions, Cigna has gotten the green light to resume selling Medicare products.

Cigna can start marketing Medicare Advantage and Part D plans immediately and can begin enrolling individuals in those plans with effective dates beginning July 1, the insurer said in a Securities and Exchange Commission filing Friday.

Cigna has been banned from both marketing and enrolling people in MA and Part D plans since January 2016. The Centers for Medicare & Medicaid Services said the insurer violated regulations regarding coverage determinations, appeals and grievances; Part D formulary and benefit administration; access to facilities and records; and compliance program effectiveness.

These violations led to increased out-of-pocket expenses for enrollees, as well as delays or denials in receiving medical services and prescription drugs, CMS said at the time, noting such issues posed a serious threat to enrollees' health and safety.

"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,” Shawn Morris, interim president for Cigna-HealthSpring, said in a statement emailed to FierceHealthcare. “As a company that puts customers first, we look forward to continuing that partnership while delivering high-quality healthcare plans to both existing and new customers.”

The process of fixing the issues cited by regulators has been a lengthy one for Cigna, and it wasn’t able to finish in time to participate in the 2017 open enrollment period for Medicare. Because of that, the insurer said in February that it expects to have 50,000 fewer senior customers in 2017. But with its sanctions now lifted, Cigna will be able to participate in this fall’s open enrollment period for 2018 plans.

Based on the final Medicare star ratings for the 2018 payment year, Cigna expects that approximately 60% of its Medicare Advantage customers will be in a plan with four stars or higher, the insurer said in its SEC filing. That’s a significant win for Cigna, since last October it revealed that only about 20% of its MA customers would be in plans with four stars or higher in 2017, a downgrade it attributed to the CMS audit.

The lifting of the CMS sanctions could also pave the way for Cigna to divest its legacy Medicare Advantage assets and pursue an acquisition of Humana, Leerink Partners analyst Ana Gupte said in a research note. Further, she said, the move supports her belief that "the new CMS is deregulating and more MA plan friendly."