(Bloomberg) — Cigna Corp. (NYSE:CI) was banned from marketing its Medicare products to new customers, after the Centers for Medicare & Medicaid Services (CMS) found deficiencies in how the health insurer ran its plans, citing widespread violations that the government said threatened patients’ health.
“Cigna has experienced widespread and systemic failures impacting Cigna enrollees’ ability to access medical services and prescription medications,” the U.S. said in a Jan. 21 letter to the insurer outlining the sanctions. “Cigna has had a longstanding history of non-compliance” with requirements from the Centers for Medicare & Medicaid Services (CMS).
Cigna and other insurers offer a privately run alternative to traditional Medicare, which includes insurance coverage for hospital and doctor care, known as Medicare Advantage, as well as prescription drug coverage, or Part D. CMS found problems involving Cigna’s appeals and grievances process, as well as with its drug coverage, the insurer said Friday in a regulatory filing.
Because of those deficiencies, Cigna won’t be allowed to market or sell Medicare Advantage policies or Part D drug plans to new clients. The government said it “determined that Cigna’s conduct poses a serious threat to the health and safety of Medicare beneficiaries.” Cigna clients who are affected by the issues cited by CMS can drop their Cigna coverage and buy policies from other insurers.
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Shares of Cigna, which is being bought by Anthem Inc. (NYSE:CI) for about $48 billion, rose 0.1 percent to $140.33 at 10:09 a.m. in New York. Anthem remains committed to the deal, spokeswoman Jill Becher said in an e-mail.
Private Medicare alternative
“Cigna is working to resolve these matters as quickly as possible and is cooperating fully with CMS on its review,” the health insurer said in the filing, adding that the sanctions don’t affect benefits offered to current enrollees.