Cigna 2012 Annual Report Download - page 27

PART I
ITEM 1 Business
Cigna Specialty Pharmacy Management. Cigna’s administered optometrist offices, as well as retail eye care centers. Routine vision
medical and pharmacy coverage can meet the needs of customers with products are offered in conjunction with Global Health Care’s
complex conditions that require specialty pharmaceuticals. These medical and dental product offerings.
types of medications are covered under both pharmacy and medical
benefits and can be expensive, often requiring associated lab work and
Funding Arrangements
administration by a health care professional. Therefore, coordination
is critical in improving affordability and outcomes. Clients with The segment’s commercial medical products and services are offered
Cigna-administered medical and pharmacy coverage benefit from through the following funding arrangements:
continuity of care, integrated reporting, and aggressive unit cost Administrative Services Only (80% of commercial medical
discounts on all specialty drugs – regardless of where they are customers);
administered.
Insured – Guaranteed Cost (14% of commercial medical
Cigna Home Delivery Pharmacy. Cigna also offers cost-effective mail customers); and
order, telephone and on-line pharmaceutical fulfillment services
through its home delivery operation. Cigna Home Delivery Pharmacy Insured – Shared Returns
SM
(6% of commercial medical customers).
provides a high-quality, efficient home delivery pharmacy Administrative Services Only. Global Health Care contracts with
distinguished by individual care relating to compliance and specialty employers, unions and other groups sponsoring self-insured plans on
medications. Orders may be submitted through the mail, via phone or an administrative services only (‘‘ASO’’) basis to administer claims and
through the internet at myCigna.com. perform other plan related services. The key features of an ASO
funding arrangement are:
Dental and Vision
Global Health Care collects administrative service fees in exchange
Dental. Cigna Dental Health offers a variety of dental care products for providing these self-insured plans with access to Global Health
including dental health maintenance organization plans (‘‘Dental Care’s applicable participating provider network and for providing
HMO’’), dental preferred provider organization (‘‘Dental PPO’’) other services and programs including: claim administration;
plans, dental exclusive provider organization plans, traditional dental quality management; utilization management; cost containment;
indemnity plans and a dental discount program. Employers and other health advocacy; 24-hour help line; 24/7 call center; case
groups can purchase Cigna Dental Health products as stand-alone management; disease management; pharmacy benefit management;
products or integrated with Global Health Care’s medical products. behavioral health care management services (through its provider
Additionally, individual customers can purchase Dental PPO plans in networks); or any combination of these services.
conjunction with individual medical policies. As of December 31, The self-insured plan sponsor is responsible for self-funding all
2012, Cigna Dental Health customers totaled approximately claims, but may purchase stop loss insurance from Global Health
11.4 million. Most of these customers are in self-insured plans. All of Care or other insurers for claims in excess of a predetermined
Cigna’s Dental HMO customers participate in guaranteed cost amount, for either individuals (‘‘specific’’), the entire group
insured plans. Managed dental care products are offered in 37 states (‘‘aggregate’’), or both.
for Dental HMO and 42 states and the District of Columbia for
Dental PPO through a network of independent health care In some cases, Global Health Care provides performance guarantees
professionals that have contracted with Cigna Dental Health to associated with meeting certain service standards, clinical outcomes,
provide dental services. or financial metrics. If these service standards, clinical outcomes, or
financial metrics are not met, Global Health Care may be financially
Cigna Dental Health customers access care from one of the largest at risk up to a stated percentage of the contracted fee or a stated
dental PPO networks and dental HMO networks in the U.S., with dollar amount. Global Health Care does not recognize revenues for
approximately 266,400 Dental PPO-contracted access points estimated payouts associated with these guarantees. See Note 2 to
(approximately 99,200 unique health care professionals) and the Consolidated Financial Statements for details regarding these
approximately 68,600 Dental HMO-contracted access points guarantees.
(approximately 18,000 unique health care professionals).
Insured – Guaranteed Cost. Charges to policyholders under an
Cigna Dental Health stresses preventive dentistry; it believes that insured, guaranteed cost policy are established at the beginning of the
promoting preventive care contributes to a healthier workforce, an policy period and are not adjusted to reflect actual claim experience
improved quality of life, increased productivity and fewer treatment during the policy period. Accordingly, Global Health Care bears the
claims and associated costs over time. Cigna Dental Health offers risk for claims and costs. Generally, guaranteed cost policyholder
customers a dental treatment cost estimator to educate customers on groups are smaller than retrospectively experience-rated groups;
oral health and aid them in their dental health care decision-making. accordingly, claim and expense assumptions may be based in whole or
Vision. Cigna Vision offers flexible, cost-effective PPO coverage that in part on prior experience of the policyholder or on a pool of
includes a range of both in and out-of-network benefits for routine accounts, depending on the policyholder’s size and the statistical
vision services. Cigna’s national vision care network, which consists of credibility of the experience.
approximately 57,500 health care professionals in approximately
23,500 locations, includes private practice ophthalmologist and
CIGNA CORPORATION - 2012 Form 10-K 5
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