Cigna 2009 Annual Report Download - page 29

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HEDIS® Measures. In addition, CIGNA HealthCare participates in NCQA’s Health Plan Employer Data and Information Set
(“HEDIS®”) Quality Compass Report. HEDIS® Effectiveness of Care measures are a standard set of metrics to evaluate the
effectiveness of managed care clinical programs. CIGNA HealthCare’s national results compare favorably to industry averages.
Technology. CIGNA HealthCare understands the critical importance of information technology to the level of service the
Company is able to provide to its members and to the continued growth of its health care business. The health care marketplace is
evolving and the level of service that is acceptable to consumers today may not be acceptable tomorrow. Therefore, CIGNA
HealthCare continues to strategically invest in its information technology infrastructure and capabilities including technology essential
to fundamental claim administration and customer service, as well as tools and Internet-enabled technology that support CIGNA
HealthCare’s focus on engaging members in health care decisions.
For example, CIGNA HealthCare has developed a range of member decision support tools including:
x myCIGNA.com, CIGNA’s consumer Internet portal. The portal is personalized with each member's CIGNA medical, dental and
pharmacy plan information;
x myCignaPlans.com, a website that allows prospective members to compare plan coverage and pricing options, before enrolling,
based on a variety of factors. The application gives members information on the total health care cost to them and their employer;
x Health Risk Assessment, an online interactive tool through which members can identify potential health risks and monitor their
health status;
x a number of interactive online cost and quality information tools that compare hospital quality and efficiency information,
prescription drug choices and average price estimates and member-specific average out-of-pocket cost estimates for certain
medical procedures; and
x a special website designed for seniors that offers customized features as well as access to both the myCIGNA.com and cigna.com
websites.
Pricing, Reserves and Reinsurance
Premiums and fees charged for HMO and most health insurance products and life insurance products are generally set in advance
of the policy period and are typically guaranteed for one year (unless specified events occur, such as changes in benefits, significant
changes in enrollment or laws affecting the coverage or costs). Premium rates for fully insured products are established either on a
guaranteed cost basis or on a retrospectively experience-rated basis.
Charges to customers established on a guaranteed cost basis at the beginning of the policy period cannot be adjusted to reflect
actual claim experience during the policy period. A guaranteed cost pricing methodology reflects assumptions about future claims,
health care inflation (unit cost, location of delivery of care and utilization), effective medical cost management, expenses, credit risk,
enrollment mix, investment returns, and profit margins. Claim and expense assumptions may be based in whole or in part on prior
experience of the account or on a pool of accounts, depending on the group size and the statistical credibility of the experience.
Generally, guaranteed cost groups are smaller and less statistically credible than retrospectively experience-rated groups. In addition,
pricing for health care products that use networks of contracted providers reflects assumptions about the future claims impact on the
reimbursement rates in the provider contracts. Premium rates may vary among accounts to reflect the anticipated contract mix, family
size, industry, renewal date, and other cost-predictive factors. In some states, premium rates must be approved by the state insurance
departments, and state laws may restrict or limit the use of rating methods.