Cigna temporarily banned from new Medicare plans - Medicare Insurance Advisors | Medicare Insurance Advisors

Cigna temporarily banned from new Medicare plans

, USA TODAY3:47 p.m. EST January 22, 2016

U.S. regulators have temporarily banned health insurer Cigna from offering certain Medicare plans to new patients after a probe uncovered issues with current offerings.

The insurer disclosed late Thursday in a public filingthat the U.S. Centers for Medicare and Medicaid Services (CMS), had suspended the company from enrolling new customers or marketing plans for Cigna Medicare Advantage and Standalone Prescription Drug Plan Contracts.

In an enforcement letter, CMS accused Cigna of “widespread and systemic failures,” including the denial of health care coverage and prescription drugs to patients who should have received them.

The actions “create a serious threat to enrollee health and safety,” said CMS, which is requiring Cigna to appoint an independent monitor to audit its handling of the matter.

The sanctions, which took effect at the end of the day Thursday, do not affect patients who are already enrolled. CMS said could not provide an estimate for how many patients were affected.

Cigna had market share of 3% in Medicare Advantage plans in 2015, representing about 502,000 patients, according to the Kaiser Family Foundation.

“As a company committed to delivering quality products and services, we focus on putting customers first.  The findings in the audit are unacceptable and will be addressed in full partnership with CMS,” said Herb Fritch, president of Cigna-HealthSpring, in a statement.

“We have internal quality review processes in place that identified some of the areas in advance of the audit findings and we have already started working to remedy them. In other instances, we will implement the changes as quickly as possible to emerge a stronger organization further dedicated to those we serve.”

CMS also accused Cigna of maintaining inadequate documentation and failing to implement a risk assessment program, among other alleged violations.

“Cigna has had a longstanding history of non-compliance with CMS requirements,” the agency said. “Cigna has received numerous notices of non-compliance, warning letters, and corrective action plans from CMS over the past several years. A number of these notices were for the same violations discovered during the audit, demonstrating that Cigna has not corrected issues of non-compliance.”

The news comes several weeks after Cigna shareholders approved the company’s $48 billion sale to insurance giant Anthem. That deal must still win approval from regulators.

Cigna’s revenue from U.S. insurance plans in 2015 reached a projected $30.4 billion, representing total industry market share of 4.1%, according to IBISWorld.

Marianne Udow-Phillips, director of the University of Michigan Center for Healthcare Research & Transformation, said in an email that the issues “must be complex enough to require some substantial operational changes that cannot be done simply and probably did reflect some prior warnings by CMS that were not heeded.”

She added: “Medicare Advantage is a very small part of Cigna’s portfolio and is not the reason why Anthem was interested in merging with them.  They have always been stronger in the self funded/large employer market.  Whether or not these problems will affect Cigna’s other market segments is unclear.”

Follow USA TODAY reporter Nathan Bomey on Twitter @NathanBomey.