Cigna Explores Potential Sale of Its Medicare Advantage Business Amid Strong Q3 Results

Last week, the Cigna Group reported a profit of $1.4 billion and revenue of $49 billion for the third quarter, exceeding expectations on Wall Street.

Cigna, a US-based health insurer, is reportedly considering the sale of its Medicare Advantage (MA) business, Reuters reported.

The company is said to be working with an investment bank to assess its options. However, a Cigna spokesperson refused to comment, stating, "We do not comment on rumors or speculation." Cigna's MA division is estimated to hold a value in the billions.

Last week, the Cigna Group reported a profit of $1.4 billion and revenue of $49 billion for the third quarter, exceeding expectations on Wall Street. This success follows Cigna's agreement to pay $172 million in October to settle allegations of inaccurate MA diagnostic codes. This settlement led to Cigna entering a five-year corporate integrity agreement with the Department of Health and Human Services.

Cigna's MA presence currently extends across 603 counties in 29 states, including 25 newly added counties, offering a $0 premium plan in every market. It's noteworthy that considering the sale of the MA business would be a significant shift from Cigna's decision to enter the MA market back in 2011 when it acquired HealthSpring for $3.8 billion.

Utilisation and costs for MA plans have been rising, a trend Cigna has also encountered. During the second quarter, Cigna acknowledged that higher utilisation levels aligned with their expectations. While discussions about selling the business are preliminary, Cigna can retain its MA plans. However, the company anticipates that changes in the reimbursement model and the star rating system might affect its MA performance in the coming year.

In earlier developments, Cigna Group faced a surge in lawsuits from both members and shareholders after a ProPublica report alleged mass denial of members' claims without individual assessment, leading to the withholding of coverage for specific services.

The report, published in March, raised concerns about potential violations of state laws by Cigna, indicating that the company's medical directors denied many claims without thoroughly reviewing individual members' records. This process was facilitated by an automated claims review system called PxDx.

Additionally, Cigna Healthcare's International Health business introduced a tailored health benefits plan designed to meet the needs of individuals aged 60 and above leading a global lifestyle.

This initiative aims to support the well-being of seniors in an increasingly mobile world, referred to as the 'Cigna Healthcare Global Plan for Seniors.' This offering is in response to the growing demand, with Cigna Healthcare's research projecting that approximately 450,000 individuals are expected to be covered by this plan by 2025.