CIGNA Banned from New Enrollments in Medicare Advantage & Prescription Drug Plans

Citing administrative improprieties and non-compliance in their appeals and grievances procedures in a recent audit, the United States Centers for Medicare and Medicaid suspended CIGNA from marketing or enrolling new members in Medicare Advantage and Medicare Part D Prescription Drug Plans.

This will not cause a hitch in the planned merger with Anthem, a deal worth over $45 billion dollars according to Anthem.  Herb Fritch, the president of Cigna-HealthSpring responded that the audit findings were “unacceptable,” and that remedies were being put into place to rectify the reported issues.

Since the ban only pertains to new enrollees, the company’s 1.5 million people already on the plan will be unaffected at this time. There is no time line on the sanctions so the company most likely won’t feel an impact if they are lifted before the next open enrollment period beginning on October 15, 2016. However if the ban is still in place during open enrollment, CIGNA could face a serious loss, since the vast majority of new members enroll during this period.

Aetna faced a similar suspension in 2010 that extended into 2011, but was back in business by the start of the 2011 open enrollment.  Cigna has until January 29 to submit a response including a plan to correct the deficiencies.