CIGNA Healthcare,by Andrew Stein May 19, 2013 vtdigger.org When Cigna disclosed its claims denials and executive compensation to the state, the publicly traded health insurance company revealed the highest rejection rate in Vermont. Its 2012 filing also contained some key inconsistencies.The public disclosure, which arrived 25 days after its due date on March 1, painted a very different view of the company’s executive compensation than the one submitted to the US Securities and Exchange Commission (SEC) 10 days earlier. Company representatives say this was due to a misunderstanding.Chart shows differences in Cigna compensations filings.The figure submitted for CEO David Cordani’s overall compensation was almost $9 million low. Cigna originally reported to Vermont that Cordani earned $3.9 million in 2012, compared to the $12.8 million filed with the SEC. Herbert Fritch, president of HealthSpring coordinated care plans under Cigna, earned $10.7 million in 2012, according to Cigna’s SEC filing. That’s a difference of $6.5 million from what was originally reported to Vermont.Cordani’s compensation was more than 10 times what MVP Health Care paid to its CEO last year and almost 22 times the amount Blue Cross Blue Shield of Vermont paid CEO Don George. MVP paid $1.25 million for the CEO position, which Denise Gonick took over from David Oliker in December, and Blue Cross paid George $587,184 for the year.While Cigna is a national company based in Connecticut, MVP covers New York, New Hampshire and Vermont, and Blue Cross of Vermont only provides coverage in the Green Mountain State.Related StoryMVP and Blue Cross claims denials.Wendell Potter, a former vice president for Cigna, brought the federal-state filing discrepancy to the attention of staff at the Department of Financial Regulation. Potter, who now reports on national health insurance issues, contacted the department in mid-April to say that Cigna ‘misrepresented’Cordani’s compensation, as he put it.Emails recovered in a public records request indicate that the company was aware of the discrepancy.‘The variance in total compensation â ¦ is due to the disclosure requirements for each document,’Stephen Petke of Cigna wrote to the Department of Financial Regulation.‘We do not agree with your interpretation of the instructions,’replied Kaj Samson, director of company examinations for the department. ‘The statute and the instructions are clear. Please re-file, taking care that total compensation agrees with the proxy statement.’Cigna re-filed this month and company spokesman Jon Sandberg said that the incongruity was caused by a misunderstanding of what the state wanted. He said public entities have no reason to obfuscate executive compensation.‘Proxies are very public documents,’he said about the SEC filings. ‘Executive compensation for public companies is very transparent.’Susan Donegan, commissioner of the Department of Financial Regulation, said that since this is the first year the state has required such filings, in accordance with Act 150, she would give Cigna the benefit of the doubt. She would not comment on potential ramifications related to the only late insurance filing and other issues the department is investigating.Sandberg said that he doesn’t think Cigna knew about the report right away.‘As best I can tell, we didn’t receive a notice at the right time and we found out a little bit later, and we filed it as soon as we could,’he said.Claims denialsCigna’s rate of denial was the highest of the three major insurance carriers in Vermont.According to its Vermont filing, Cigna denied 21 percent of all claims, more than one in five. MVP denied 15.5 percent of all claims and Blue Cross denied 7.6 percent.In a Huffington Post column headlined ‘The Higher Health Insurers’Claim Denial Rate, the Higher the CEO Pay,’ Potter spotlights a correlation between CEO salaries and denial rates in Vermont.Donegan said that what jumped out at her in the filing is that administrative denials accounted for the bulk of Cigna’s refusals. Administrative denials arise when there are clerical or administrative issues surrounding a claim.What are known as ‘member-impact denials’arise when someone is denied care for a treatment or drug that is deemed medically unnecessary.Generally speaking, health care professionals view administrative denials as more benign than member-impact denials because straightening out an administrative error is easier than filing an appeal for a medical reason.But Potter wrote in his column that the high administrative denial rate is still concerning.‘It defies reason to think that the doctors and hospitals in Vermont submitted inaccurate claims to Cigna at almost three times the rate they did to Blue Cross,’he wrote. ‘One of the things you need to know about the private health insurance business is that insurers make a lot of money when they delay paying a claim.’What’s more is that Cigna’s denials do not add up. Falko Schilling, consumer advocate at the Vermont Public Interest Research Group, pointed out the faulty math.Cigna reports denying a total of 42,139 claims in 2012, 30,130 of those were administrative and 6,461 were member impact denials. The administrative and member impact denials are supposed to add up, but they don’t. They fall more than 6,500 short of the total mark.Jon Sandberg said that this new filing is difficult for Cigna.‘We’re a national insurance company,’he said. ‘We don’t really keep numbers the way Vermont is asking us to comply with. We’re learning as we go, and I think there were a group on administrative denials who were approved. â ¦ We’re on a steep learning curve, and we’re doing our best to get it right.’The state’s insurance companyCigna contracts with Vermont to administer the health insurance plan for state employees.‘I haven’t had any problems with Cigna,’said Jeb Spaulding, secretary of the Shumlin administration. ‘When we hire someone, whether it’s Cigna or Blue Cross, they are using the rules that we set up.’According to numbers from the Department of Human Resources, Cigna covers 23,365 lives (employees and dependents) for the state. Kate Duffy, commissioner of the department, said that the state plan had an overall denial rate of 1.3 percent this past year.‘The state has a pretty generous plan,’she said.Cigna’s filing does not include these numbers; it only includes the 9,552 fully insured lives covered under its own plans.Cigna provides coverage to numerous employers in Vermont, and it administers plans for large employers. It does not offer individual plans in Vermont, and the company is not going to offer plans on the state’s new health insurance marketplace, called Vermont Health Connect. The estimated 118,000 Vermonters purchasing individual plans, or with businesses that have fewer than 50 employees, will choose between Blue Cross and MVP plans.A new member-owned health insurance cooperative, Vermont Health Co-op, is hoping to receive state licensure in the next month or two. If the cooperative receives the go-ahead, it would offer a third set of plans on the health insurance exchange. AMENDED REPORT
The African Union peacekeeping mission (AMISOM) forces ended a ten-day training course on Sunday in a move aimed at stepping up efforts to counter widespread use of explosives.The training for the South West state police officers held in the administrative capital, Baidoa in southern Somalia, focused on prevention and detection of Improvised Explosive Devices (IEDs) which has become the preferred weapon of choice for Al-Shabaab and other militant groups in Somalia.AMISOM Inspector of Police, Sahr Emmanuel Kobai-Aruna noted in his closing remarks that the training was meant to enhance the capacity of the South West Police Force, adding that the officers were taken through a number of topics on safety and security.“This is part of AMISOM’s mandate to capacitate Somali Police Force and we taught them some components of IED/ Explosive Ordnance Disposal (EOD); the types EOD/IED and other management course modules,” said Kobai-Aruna in a statement issued after the training.“We even taught them first aid at crime scene and casualty awareness assessment,” added Kobai-Aruna.The training course, which reviewed threats, posed by IEDs was aimed at equipping the Somali police with vital skills to detect explosives planted by terrorists.“We have just finished the course on IED and Explosive Ordnance Disposal (EOD) for 15 participants drawn from Somali police force,” said Tresphord Kasale, the AMISOM Police Coordinator for South West State.“The purpose of this course was to create awareness (among) the officers so that they are able to identify IEDs and be able to call upon experts to come and defuse them,” Kasale added.He said the training was also aimed at creating awareness among the general public on the dangers of explosives and how to identify them.He urged the public to inform security officers whenever they detect or identify an IED, for safe handling and detonation, to prevent loss of life and destruction of property.Kasale said the AU mission has played a crucial role in establishing the South West State Police Force, by training 600 police officers, who have played a major role in improving security in the region.In addition, another 600 police officers in Jubbaland have also been trained and plans are underway to recruit and train more officers in HirShabelle state next year.