Cigna 2011 Annual Report Download - page 30

8CIGNA CORPORATION2011 Form10K
PARTI
ITEM 1 Business
Pricing for self-funded arrangements is generally based on the expected
cost to administer those arrangements and will vary by the services
provided and the size and complexity of the benet programs, among
other factors.
Reserves
In addition to paying current benets and expenses under HMO
and health insurance policies, Cigna HealthCare establishes reserves
for amounts estimated to fund reported claims not yet paid, as well
as claims incurred, but not yet reported. As of December31,2011,
approximately $1.4billion, or 61% of the reserves of Cigna HealthCare’s
operations comprised liabilities that are likely to be paid within one
year, primarily for medical and dental claims, as well as certain group
disability and life insurance claims. e reserve amount expected to
be paid within one year includes $194million that is recoverable from
certain ASO customers and from minimum premium policyholders.
e remaining reserves relate primarily to contracts that are short
term in nature, but have long term payouts and include liabilities for
group long-term disability insurance benets and group life insurance
benets for disabled and retired individuals, benets paid in the form
of both life and non-life contingent annuities to survivors and contract
holder deposit funds.
Reinsurance
Cigna HealthCare reduces its exposure to large catastrophic losses
under group life, disability and accidental death contracts by purchasing
reinsurance from unaliated reinsurers.
Financial information, including premiums and fees, is presented in
the Health Care section of the MD&A beginning on page45 and in
Note22 to Cigna’s Consolidated Financial Statements beginning on
page116 of this Form10-K.
Service and Quality
Customer Service
Cigna HealthCare operates 16service centers that together processed
approximately 136million medical claims in 2011. Satisfying customers
is a primary business objective and critical to the Company’s success.
To further this objective, in 2009, the Company made its call centers
available 24hours a day, seven days a week, 365days a year. As of
December31,2011, Cigna operated 10 call centers and a virtual
call team that customers can call toll-free about their health care
benets, wellness programs and claims. Cigna recognizes that customers
with signicant health events may have additional customer service
needs. erefore, Cigna has developed the “My Personal Champion”
program, which provides qualied customers with a dedicated point of
contact. Personal Champions serve as a resource for benets and claims
questions, assist with navigating the complex health care industry and
oers education and support to customers and their families. As of
December31,2011, approximately 4million Cigna customers had
access to the My Personal Champion program.
Technology
Cigna HealthCare understands the important role that information
technology plays in improving the level of service that Cigna can
provide to its customers, which is critical to the continued growth
of the Company’s health care business and its focus on customer-
centricity. Accordingly, Cigna HealthCare continues to invest in its
information technology infrastructure and capabilities including tools
and Internet-enabled technology that support Cigna HealthCare’s
focus on providing customers with a personalized experience in making
health care decisions. Examples include:
•
myCigna.com, Cigna’s consumer Internet portal. e newly redesigned
portal is personalized with customers’ medical, dental and pharmacy
plan information. Customers can use online tools to understand
their benets, track their claims and nances and manage their
health. MyCigna is a multi-media portal with video content, social
networking capabilities, podcasts and other interactive tools to help
customers achieve their health and nancial goals. Cigna customers
can now access much of this information through their mobile phones,
making it easier to get the information customers need when and
where they need it;
•
myCignaPlans.com, a website that allows prospective customers who
purchase medical coverage through their employer to compare plan
coverage and pricing options, before enrolling, based on a variety
of factors. e application gives customers information on the total
health care cost to them and their employer;
•
Health Risk Assessment, an online interactive tool that helps customers
identify potential health risks and monitor their health status;
•
social media, including dedicated YouTube and Facebook pages
that allow individuals to participate in online communities specic
to Cigna and their interest in health awareness and improvement;
•
a number of interactive online cost and quality information tools that
compare hospital quality and eciency information, prescription
drug choices and average price estimates and member-specic average
out-of-pocket cost estimates for certain medical procedures; and
•
a special website designed for seniors, with large font and documents
designed for the visually impaired, sections focused on understanding
Medicare with educational information and a Medicare “Toolkit”,
as well as easy access to plan information in English and Spanish.
Benefit/Claim Resolution
Cigna HealthCare customer service representatives are empowered to
immediately resolve a wide range of issues to help customers obtain the
most from their benet plans. If an issue cannot be resolved informally,
Cigna HealthCare has a formal appeals process that can be initiated
by telephone or in writing and involves two levels of internal review.
For those matters not resolved by internal reviews, Cigna HealthCare
customers are oered the option of a voluntary external review of
claims. e Cigna HealthCare formal appeals process addresses member
inquiries and appeals concerning initial coverage determinations based
on medical necessity and other benets/coverage determinations. Cigna
HealthCare’s formal appeals process meets regulatory requirements,
including the National Committee for Quality Assurance (“NCQA”),
Employee Retirement Income Security Act of 1974 (“ERISA”), and
Utilization Review Accreditation Commission (“URAC”).
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