Cigna 2015 Annual Report Download - page 35

PART I
ITEM 1. Business
an identified threshold to review by the United States Department of many of the coordinated care aspects of our Medicare Advantage
Health and Human Services (‘‘HHS’’) and requires payment of programs.
premium refunds on individual and group medical insurance We receive revenue from the states of Texas and Illinois for our
products if minimum medical loss ratio (‘‘MLR’’) requirements are Medicaid only customers. For customers eligible for both Medicare
not met. In our individual business, premiums may also be adjusted as and Medicaid (‘‘dual eligibles’’) we receive revenue from both the state
a result of the government risk mitigation programs. The MLR and CMS. All revenue is based on customer demographic data and
represents the percentage of premiums used to pay medical claims and actual customer health risk factors. Similar to Medicare Advantage,
expenses for activities that improve the quality of care. See the there are minimum MLR requirements in Illinois (85% for the dual
‘‘Regulation’’ section of this Form 10-K for additional information on product and 88% for the Medicaid only product). However, Texas
the commercial MLR requirements and the risk mitigation programs utilizes an experience rebate in an effort to provide better value to
of Health Care Reform. consumers and increase transparency. The Texas experience rebate
takes into account operating expenses and requires a rebate of dollars
Government Health Plans
to the state as different profitability thresholds are met.
Medicare Advantage
Specialty Products and Services
We offer Medicare Advantage plans in 15 states and the District of Our specialty products and services described below are designed to
Columbia through our Cigna-HealthSpring brand. Under such a improve the quality of and lower the cost of medical services and help
plan, Medicare-eligible beneficiaries may receive health care benefits, customers achieve better health outcomes. Many of these products can
including prescription drugs, through a managed care health plan be sold on a standalone basis, but we believe they are most effective
such as our coordinated care plans. A significant portion of our when integrated with a Cigna-administered health plan. Our specialty
Medicare Advantage customers receive medical care from our products are focused in the areas of medical, behavioral, pharmacy
innovative plan models that focus on developing highly engaged management, dental and vision.
physician networks, aligning payment incentives to improved health
outcomes, and using timely and transparent data sharing. We are
Medical Specialty
focused on continuing to expand these models in the future.
•Cost-Containment Service. We administer cost-containment
We receive revenue from the Centers for Medicare and Medicaid
programs on behalf of our clients and customers for health care
Services (‘‘CMS’’) for each plan customer based on customer services and supplies that are covered under health benefit plans.
demographic data and actual customer health risk factors compared to These programs may involve vendors who perform activities
the broader Medicare population. We also may earn additional designed to control health costs by reducing out-of-network
revenue from CMS related to quality performance measures (known utilization and costs, including educating customers regarding the
as ‘‘Medicare Stars’’). The Medicare Stars payment equals 5% per availability of lower cost, in-network services, negotiating discounts,
member risk-adjusted revenue added to the CMS payment for each reviewing provider bills, and recovering overpayments from other
contract that achieves four stars or higher. Additional premiums may payers or health care providers. We charge fees for providing or
be received from customers, representing the difference between CMS arranging for these services.
subsidy payments and the revenue determined as part of our annual
Medicare Advantage bid submissions. Health Care Reform requires •Health Advocacy. We offer a wide array of medical management,
Medicare Advantage and Medicare Part D plans to meet a minimum disease management, and other health advocacy services to
MLR of 85%. If the MLR for a CMS contract is less than 85%, we are employers and other plan sponsors to help individuals improve their
required to pay a rebate to CMS and could be required to make health, well-being and sense of security. These services are offered to
additional payments if the MLR continues to be less than 85% for customers covered under plans that we administer, as well as plans
successive years. insured or administered by competing insurers or third-party
administrators. Our health advocacy programs and services include
Medicare Part D
early intervention in the treatment of chronic conditions. We also
offer online tools and software to help customers manage their
Our Medicare Part D prescription drug program provides a number of health and an array of health coaching programs designed to address
plan options, as well as service and information support to Medicare lifestyle management issues such as stress, weight, and tobacco
and Medicaid eligible customers. Our plans are available in all 50 cessation.
states and the District of Columbia and offer the savings of Medicare
combined with the flexibility to provide enhanced benefits and a drug
Behavioral Health
list tailored to individuals’ specific needs. Retirees benefit from broad
network access and value-added services intended to help keep them We arrange for behavioral health care services for customers through
well and save them money. our network of approximately 96,000 participating behavioral health
care professionals and 12,500 facilities and clinics. We offer behavioral
health care case management services, employee assistance programs
Medicaid
(‘‘EAP’’), and work/life programs to employers, government entities
We offer Medicaid coverage to low income individuals in selected and other groups sponsoring health benefit plans. We focus on
markets in Texas and Illinois. Our Medicaid customers benefit from integrating our programs and services with medical, pharmacy and
disability programs to facilitate customized, holistic care.
CIGNA CORPORATION - 2015 Form 10-K 5