Cigna 2014 Annual Report Download - page 36

PART I
ITEM 1. Business
We offer stop loss insurance coverage for ASO plans that provides states and the District of Columbia and offer the savings of Medicare
reimbursement for claims in excess of a predetermined amount for combined with the flexibility to provide enhanced benefits and a drug
individuals (‘‘specific’’), the entire group (‘‘aggregate’’), or both. Our list tailored to individuals’ specific needs. Retirees benefit from broad
experience rated group medical insurance policies include funding network access and value-added services intended to help keep them
options similar to stop loss coverage. well and save them money.
In most states, individual and group insurance premium rates must be
Medicaid
approved by the applicable state regulatory agency (typically
department of insurance) and state laws may restrict or limit the use of We offer Medicaid coverage to low income individuals in selected
rating methods. Premium rates for groups and individuals are subject markets in Texas and Illinois. Our Medicaid customers benefit from
to state review for reasonableness. In addition, Health Care Reform many of the coordinated care aspects of our Medicare Advantage
subjects individual and small group policy rate increases above an programs. We expect to further expand our Medicaid operations
identified threshold to review by the United States Department of during 2015 under existing contracts.
Health and Human Services (‘‘HHS’’) and requires payment of
premium refunds on individual and group medical insurance
Specialty Products
products if minimum medical loss ratio (‘‘MLR’’) requirements are
Our specialty products and services described below are designed to
not met. In our individual business, premiums may also be adjusted as
improve the quality of and lower the cost of medical services and help
a result of the government risk mitigation programs. The MLR
customers achieve better health outcomes. The vast majority of these
represents the percentage of premiums used to pay medical claims and
products can be sold on a standalone basis, but we believe they are
expenses for activities that improve the quality of care. See the
most effective when integrated with a Cigna-administered health
‘‘Regulation’’ section of this Form 10-K for additional information on
plan. Our specialty products are focused in the areas of medical,
the commercial MLR requirements and the risk mitigation programs
behavioral, pharmacy management, dental and vision.
of Health Care Reform.
Medical Specialty
Government Health Plans
•Cost-Containment Service. We administer cost-containment
Medicare Advantage
programs on behalf of our clients and customers for health care
We offer Medicare Advantage plans in 16 states and the District of services and supplies that are covered under health benefit plans.
Columbia through our Cigna-HealthSpring brand. Under a Medicare These programs may involve vendors who perform activities
Advantage plan, Medicare-eligible beneficiaries may receive health designed to control health costs by reducing out-of-network
care benefits, including prescription drugs, through a managed care utilization, including educating customers regarding the availability
health plan such as our coordinated care plans. A significant portion of lower cost, in-network services, reviewing provider bills, and
of our Medicare Advantage customers receive medical care from our recovering overpayments from other payers or health care providers.
innovative plan models that focus on developing highly engaged We charge fees for providing or arranging for these services.
physician networks, aligning payment incentives to improved health •Health Advocacy. We offer a wide array of medical management,
outcomes, and using timely and transparent data sharing. We are disease management, and other health advocacy services to
focused on continuing to expand these models in the future. employers and other plan sponsors to help individuals improve their
We receive revenue from the Centers for Medicare and Medicaid health, well-being and sense of security. These services are offered to
Services (‘‘CMS’’) for each plan customer based on customer customers covered under plans that we administer, as well as plans
demographic data and actual customer health risk factors compared to insured or administered by competing insurers or third-party
the broader Medicare population. We also may earn additional administrators. Our health advocacy programs and services include
revenue from CMS related to quality performance measures (known early intervention in the treatment of chronic conditions. We also
as ‘‘Medicare Stars’’). Additional premiums may be received from offer online tools and software to help customers manage their
customers, representing the difference between CMS subsidy health and an array of health coaching programs designed to address
payments and the revenue determined as part of our annual Medicare lifestyle management issues such as stress, weight, and tobacco
Advantage bid submissions. Beginning in 2014, Health Care Reform cessation.
requires Medicare Advantage and Medicare Part D plans to meet a
minimum MLR of 85%. If the MLR for a CMS contract is less than
Behavioral Health
85%, we are required to pay a rebate to CMS and could be subject to
additional sanctions if the MLR continues to be less than 85% for We arrange for behavioral health care services for customers through
successive years. our network of approximately 89,000 participating behavioral health
care professionals and 11,400 facilities and clinics. We offer behavioral
health care case management services, employee assistance programs
Medicare Part D
(‘‘EAP’’), and work/life programs to employers, government entities
Our Medicare Part D prescription drug program provides a number of and other groups sponsoring health benefit plans. We focus on
plan options, as well as service and information support to Medicare integrating our programs and services with medical, pharmacy and
and Medicaid eligible customers. Our plans are available in all 50 disability programs to facilitate customized, holistic care.
4 CIGNA CORPORATION - 2014 Form 10-K