Cigna
Insurer settles in New York state for $50 million - posted by Steven Wevodau
By Rob Varnon
STAFF WRITER
Updated: 01/20/2009 12:22:33 AM EST
Minnesota-based UnitedHealth Group, which has a large presence in Connecticut, said on Jan. 13 it approved a $50 million agreement to settle price-gouging allegations.
United Health Group’s problems started in February 2008, when New York Attorney General Andrew Cuomo — in response to complaints in his state — announced he was investigating its Igenix Inc. subsidiary, which operates computer databases used to determine reimbursement rates for medical procedures.
UnitedHealth agreed to pay the $50 million to establish an independent database that will replace its Ingenix database products.
The new nonprofit organization will also have to give consumers information about medical costs.
A court must still decide whether there is any underpayment. There was no mention of patients seeing some sort of repayment.
UnitedHealth would not comment on the issue beyond its press release.
The company said there will be no impact on jobs at its Ingenix facility in Rocky Hill, or its Trumbull UnitedHealth and Oxford Health Plans operations.
“For the past 10 years, American patients have suffered from unfair reimbursements for critical medical services due to a conflict-ridden system that has been owned, operated and manipulated by the health insurance industry,” Cuomo said in a press release. “This agreement marks the end of a flawed system.”
Shares of UnitedHealth closed down 26 cents to $25.36 in trading on the New York Stock Exchange.
Cuomo’s office began investigating complaints that Ingenix-produced numbers for out-of-network expenses were far lower than what doctors were charging, which meant UnitedHealth customers were paying too much.
When a person uses an out-of-network doctor for treatment, the insurer usually promises to pay a portion, generally 80 percent, of the bill based on a database that catalogs the cost of medical treatments across the country.
For example, if a doctor charges $200 for a procedure when the database says the usual rate is $100, the insurer would only pay 80 percent of the database price, or $80, leaving the patient to pay the remaining $120.
Because Ingenix is used by almost every other health insurance company in the nation, Cuomo said his investigation is continuing into those companies.
The New York Attorney General won praise from Connecticut Attorney General Richard Blumenthal.
“Today’s settlement between New York and UnitedHealth Group — eventually establishing a new reimbursement rate system — is a significant step toward protecting patients who may have been shortchanged millions of dollars over several years by insurers,” Blumenthal said in a prepared statement.
He is conducting his own investigation into the matter.
“My investigation into UnitedHealth Group, its Ingenix subsidiary and several other insurers is continuing to ensure that any company that may have misused or manipulated reimbursement rates is held accountable, including possible restitution for consumers.”
Blumenthal and Cuomo said a major concern was that Ingenix, owned by one insurer and collecting fees from others, was beholden to the insurance industry and was therefore compromised in its ability to deliver unbiased price information.
Mark Thompson, executive director of the Fairfield County Medical Association, which represents doctors, said the county’s doctors and patients have been hit with unfair reimbursement rates for years, but no one has done anything about it until now.
“We were questioning a decade ago the veracity of the information that the insurance companies were submitting as the usual charge,” said Thompson. “We talked to our legislators about that. We talked to the insurance companies, and when we asked them to show us how they came up with their data, they said it was proprietary.”
“It’s kind of like the Madoff situation. There were red flags going up,” Thompson said, referring to allegations of a $50 billion Ponzi scheme.
He said he hopes Cuomo’s actions lead to changes in Connecticut, as well.
Hartford-based Aetna Inc. and Bloomfield-based Cigna Corp. have also been subpoenaed by Cuomo about their use of Ingenix rates.
In a prepared statement, Aetna praised the move to an independent, nonprofit organization that will provide this data in the future.
Cigna noted this agreement does not involve it and said it uses Ingenix properly.
Cigna said this situation has occurred in part because consumers have not been given access to the real costs of health care, and the company supports efforts to do that.
Material from the Associated Press was used in this report.
Walgreen announces Complete Care wellness program
posted by Steven Wevodau
NEW YORK — Walgreen Co. said Wednesday it is rolling out a program it says will save employers and health insurers money, while giving discounts to employees at its brand name drugstores.
The program, called Complete Care and Well-Being program, is being launched through Walgreen’s Take Care Health Systems business. Deerfield, Ill.-based Walgreen said Complete Care will offer clear pricing to employers and give workers a 15 percent discount on Walgreen brand products and lower prices on prescription drugs.
The company did not offer any details on the cost of starting the program.
Walgreen operates more than 300 work site health centers at manufacturing facilities and employer campuses. At those centers, workers can see doctors and nurses for consultations, physicals and urgent care at the clinics as well as filling prescriptions and getting help with medication.
Walgreen says Complete Care and Well-Being will also help to health insurers and pharmacy benefits managers. It said the program will lead to greater satisfaction for patients, who can be seen quickly at clinics and get the discounts, while benefiting insurers and PBMs by reducing health care costs and making sure patients with chronic illnesses keep taking their prescriptions.
Walgreen has its own pharmacy benefits management business, called Walgreens Health Initiatives.
The company runs 6,636 drugstores in 49 states, and said half the U.S. population lives within two miles of at least one of its stores.
Walgreen bought Take Care Health Systems in May 2007. Take Care operates 322 clinics in Walgreen stores, and has entered partnerships with health insurers including Aetna Inc., Cigna Corp., Coventry Health Care Inc., Humana Inc., UnitedHealth Group Inc.
Individuals with CIGNA Life, Accident and Disability Plans Reap Healthy Rewards
POSTED BY STEVEN WEVODAU
PHILADELPHIA - (Business Wire) Purchasing life, accident and disability insurance is a good way to protect your financial security. For people enrolled in any of CIGNA’s life, accident or disability plans, this smart financial decision is now a smart health decision too.
CIGNA today said it is extending its Healthy Rewards® discount program and is now among the first group carriers to offer a health and wellness discount amenity program at no additional cost to people who have life, accident or disability coverage. CIGNA’s Healthy Rewards program offers a wide range of health products and services at discounts of up to 60 percent.
“Protecting health, well-being and security means making smart financial decisions and good health care choices, and we’re working to help people do both,” said Rebekah Whitehouse, chief marketing officer for CIGNA Group Insurance. “Healthy Rewards can help people stretch their budgets and save money on programs and products they might be considering or are already using.”
According to a recent survey conducted by CIGNA1, at least two-thirds of Americans say that certain health services provided by a health plan would be helpful. Specifically, 75 percent said that discounts for weight loss programs and fitness centers would be helpful. In the same survey, 93 percent of people said that healthy behaviors would help them enjoy life more and improve their energy.
Through Healthy Rewards, people can get discounts on programs such as Weight Watchers® and Jenny Craig®, chiropractic care, acupuncture, massage therapy, fitness club discounts, a “Just Walk 10,000 Steps-a-Day™ program. Whitehouse said this program is one of many ways CIGNA offers both the security of insurance protection and affordable health improvement services that its customers value.
According to the U.S. Centers for Disease Control and Prevention, more than half of U.S. adults do not get enough physical activity to benefit their health, and 24 percent are not active at all in their leisure time. “We know that poor lifestyle choices can lead to health complications down the line,” said Whitehouse. “Using the products and services available through Healthy Rewards can improve people’s overall health and well-being, potentially help minimize their risk for an unexpected illness or injury, and even help shorten the duration of a future disability.”
According to the 2004 Surgeon General’s Report, The Health Consequences of Smoking, eliminating smoking can greatly reduce the occurrence of coronary heart disease and other forms of cardiovascular disease. CIGNA Healthy Rewards offers several tobacco cessation resources.
Another added benefit of the program is that people can use the discounts at their convenience. “No doctor’s referrals or claim forms are needed, just a Healthy Rewards membership card when it’s time to pay for discounted services. It’s that simple for people to save money on health services,” said Whitehouse.
With this extension, Healthy Rewards discounts are now available with all CIGNA medical, behavioral health, pharmacy, dental, life, accident and disability plans. Anyone enrolled in one of these CIGNA plans, and their household members, can reap the rewards of affordable, convenient ways to improve wellness.
To learn more about CIGNA Healthy Rewards, visit www.cigna.com/healthyrewards.
CIGNA (NYSE:CI), one of the nation’s leading health service companies, is dedicated to helping the people we serve improve their health, well-being and security thorough a diversified portfolio of benefits and services. Serving approximately 47 million people throughout the United States and around the world, CIGNA Corporation’s operating subsidiaries offer a full portfolio of medical, dental, behavioral health, pharmacy and vision care benefits as well as group life, accident and disability insurance. “CIGNA,” “CIGNA Group Insurance” and the “Tree of Life” logo are registered service marks of CIGNA Intellectual Property, Inc., licensed for use by CIGNA Corporation and its operating subsidiaries. All products and services are provided exclusively by such operating subsidiaries and not by CIGNA Corporation. Such operating subsidiaries include Life Insurance Company of North America, CIGNA Life Insurance Company of New York, and Connecticut General Life Insurance Company.
1 “Health & the Economy,” prepared for CIGNA by TSC, a division of Yankelovich, Inc., September/October 2008.
CIGNA
Jill Roman, 215-761-1489
jill.roman@cigna.com
or
Amy Turkington, 440-934-5385
amy.turkington@cigna.com
Cigna to cut 1,100 jobs - posted by Steven Wevodau
Weakening economy causes health insurer to cut 4% of its workforce.
LOS ANGELES (Reuters) — Health insurer Cigna Corp. said Monday it will cut 1,100 jobs, or about 4% of its workforce, and consolidate certain operations as it copes with the economic downturn.
As a result, the company said it expects to record after-tax restructuring charges of $30 million to $40 million in the fourth quarter of 2008.
The weakening economy has created challenges for health insurers, including pressure on enrollment as employers cut staffing, endure investment losses and worry about their balance sheets.
“Given the unprecedented economic situation we and our customers are facing, these actions are essential to ensure we can meet their needs for high-value, cost-effective products and services,” Chairman and Chief Executive H. Edward Hanway said in a statement.
The Cigna news follows a similar announcement last month from No. 3 health insurer Aetna, which said it would cut 1,000 jobs, or about 3% of its workforce, by the end of 2008.
UnitedHealth Group Inc., the largest U.S. health insurer by market value, said in July it was cutting some 4,000 jobs, or about 5% of its workforce, over the course of a year.
Cigna said it expects the job cuts to be completed by midyear 2009.
The company’s shares rose 2% to close at $18.15 on the New York Stock Exchange before the job cuts were announced. 
Managed-care stocks took a beating in 2008 - Steven Wevodau
The Dow Jones U.S. healthcare providers index, a broader category that also includes hospital chains and smaller insurance companies, fell 45 percent. The S&P 500 fell 38.5 percent, the Dow Jones total market index 40 percent.
Insurers set themselves up for a rough 2008 by pricing premiums too low to cover medical-cost outlays. That was likely a result of misreading claims data from 2007, said Dave Shove, an analyst for BMO Capital Markets.
Competition also led insurers to take risks by pricing coverage low, said Stifel Nicolaus analyst Thomas Carroll.
“Because of the desire to maintain business, I think the managed-care company was more willing to gamble with lower price increases,” he said in a recent interview.
What happened
Claims levels in areas like Medi- care Advantage products were higher than expected, and claims-processing problems forced WellPoint to cut its 2008 outlook in March. The insurer’s stock plunged 28 percent the next day, and the change rattled investors throughout the sector.
“Going into 2008, WellPoint was considered the safety stock in the group,” Carroll said. “It was like a big disconnect in the market, and I think was what triggered the violent reaction in the sector.”
Wall Street also lost confidence in management, Citi analyst Charles Boorady said.
“There was a lack of trust because [they] said they were pricing at or above cost trend when they were actually pricing below cost trend,” he said.
And by early summer, Carroll had started hearing concerns about insurance investment portfolios. People worried about health insurers’ exposure to troubled companies like Lehman Bros. Investors grew nervous that insurers would have to raise money by issuing stock or diving into expensive debt markets for capital because of investment hits.
“As a result, you had investors absolutely staying away from the group,” he said. “In reality, it turned out to be about 1 1/2 to 2 percent of investment portfolios were exposed to what we would call questionable investments.”
Humana, for example, recorded a loss of $108.3 million in its third quarter because of a downturn in the company’s investment and securities lending portfolios and the sale of distressed financial-institution securities. Although the loss hurt quarterly results, it was just a fraction of Humana’s more than $6 billion investment port- folio.
What’s ahead
Despite the rough year, analysts think that health insurers can rebound in 2009. Shove said insurers can correct the pricing mistake, for example.
Carroll said the industry bottomed out in 2008. He noted that earnings expectations will be low heading into the new year and that a still-ailing market may view managed care “as a place of outperformance.”
“I tend to think that the managed care group in 2009 is going to be a good bet,” Carroll said.
However, managed-care companies can expect to lose business as large corporations cut jobs in a slow economy, reducing health-insurance membership. Standard & Poor’s lowered its credit outlook for U.S. health insurers to “negative” from “stable” last month because of slowing growth prospects and a weaker 2009 economic forecast.
On the other hand, some say the weak economy will prompt many people to cut down on doctors’ visits and delay medical procedures, which would keep health insurers’ costs down and help their profit margins.
Doctors wary of virtual visits - Steven Wevodau
Liability, privacy issues make physicians slow to embrace technology
By Susan Jenks
FLORIDA TODAY
In the Internet age, surveys show fewer than one in three doctors nationwide engage in “e-visits” with their patients.
And in Brevard County, Fla., the number of physicians communicating electronically may be even lower, according to several tech-savvy doctors.
“I do believe this is the wave of the future, but we aren’t there yet,” said Dr. Samuel Del Rio, an obstetrician/gynecologist with Partners in Women’s Health, owned by Wuesthoff Health System.
Privacy and access problems, liability issues and a lack of reimbursement for dispensing free medical advice lie behind an apparent resistance within the health-care industry to move more rapidly online with these doctor/patient e-relationships. Cost also can play a role, especially in a small practice.
“Physicians are slow to embrace new technology,” said Dr. Jeffrey Greenspoon, orthopedic surgeon in Melbourne, who has been communicating with his patients by e-mail for almost a decade. “They are very resistant to change their way of doing things.”
Also, Greenspoon said, “economics is a big hurdle,” as insurers provide no reimbursement to doctors for their e-mail transactions, even though these communications often substitute for regular office visits.
Dr. Tim Laird, Health First family practice physician in Port St. John, says e-mail consultations with patients, which he has done for several years, are “well suited to simple questions” that may not justify an office visit, but still are of concern to a patient.
“There are a lot of times where you don’t need to see the patient in front of you,” he said, citing blood pressure readings as “a perfect use for e-mail.”
Because patients can take these readings at home, he said, they are able to send the results online so he can determine whether to adjust their blood pressure medications.
Laird said e-mail also is good for sharing routine test results with patients.
Earlier this year, two major insurers, Cigna Corp. and Aetna Inc., expanded pilot programs that compensate physicians who use a secure Internet site to make virtual house calls with patients — a step, doctors say, is in the right direction.
The American Medical Association also recently issued guidelines for physician-patient electronic communications. The guidelines emphasize the need to draw patients into the process at the outset to avoid confusion, and stress that “new communication technologies must never replace” face-to-face time with patients.
Dr. David Hurwitz, clinical director of informatics at Health First, who also works part time as an internist at Omni Healthcare, said there is “huge potential” for doctors to improve communication with patients through e-mail.
But, like his colleagues, he cautions “it’s got to be easy and seamless,” or it will be a tough sell for many physicians, “especially if they are technophobic.”
Most studies show patients don’t abuse the privilege of having a direct electronic pipeline to their doctor, if it’s available.
In 2007, for example, a University of Pittsburgh study, published in the journal Pediatrics, found that after following 121 families who e-mailed their doctors, 6 percent of e-mails were urgent, with the rest geared to more routine matters. And doctors in the study received most of the e-mails after business hours — about one a day — responding 57 percent faster than by telephone.
Another study by Kaiser Permanente last year found that patients who used the health-care provider’s secure Web site were almost 10 percent less likely to schedule an office visit.
Results of the study, published in the American Journal of Managed Care, also found that patients made 14 percent fewer phone calls than those who did not use the online services. Greenspoon’s experience supports such findings.
Over the years, the e-mail system has paid off, not only in terms of customer satisfaction, Greenspoon said, but also in making his office far more efficient.
In addition, privacy concerns have not materialized, “to the extent we can now use secure encryption,” similar to that used in any credit card transaction.
Calif. teen’s family sues over transplant - Steven Wevodau
LOS ANGELES (AP) – The family of a 17-year-old leukemia patient has sued health insurance giant Cigna Corp. for her death in 2007 after the company initially refused to pay for a liver transplant.The lawsuit filed last week in Los Angeles County Superior Court by the family’s attorney, Mark Geragos, alleges breach of contract, unfair business practices and intentional infliction of emotional distress. The suit accuses Cigna of delaying and rejecting valid claims, which resulted in the wrongful death of Nataline Sarkisyan.
The Philadelphia-based insurer eventually approved the transplant after Sarkisyan’s family held a rally outside Cigna’s suburban Los Angeles office. Nataline, however, died hours after the approval was secured.
Chris Curran, a spokesman for Cigna, said the company empathizes with the family but feels the lawsuit is without merit. Curran said Cigna volunteered to pay for the procedure out of its own pocket and not the employer’s.
Nataline was diagnosed with leukemia at 14 and received a bone marrow transplant from her brother the day before Thanksgiving 2007. A complication, however, caused the teen’s liver to fail.
The family had asked Cigna to pay for a liver transplant but the insurer refused, calling the procedure experimental.
In a subsequent letter to Cigna, four doctors from Mattel Children’s Hospital at UCLA Medical Center appealed to the insurer to reconsider. They said patients in similar situations who undergo transplants have a six-month survival rate of about 65 percent.
The insurer eventually reversed the decision while about 150 nurses and community members rallied outside its office in Glendale.
By this time, however, the teen had fallen into a vegetative state and was taken off life support. She died within the hour.
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