The first two times Cigna disclosed its claims denials to the state of Vermont, the publicly traded health insurance company revealed the highest rejection rate in Vermont.
In its third time filing the statement for 2012, the company’s denials are way down — 26,263 claims denials fewer, to be exact. Cigna’s third disclosure comes after the state asked Cigna to file the report a second time due to discrepancies in executive compensation between the Vermont disclosure and the company’s submission to the U.S. Securities and Exchange Commission.
Falko Schilling is an advocate for the Vermont Public Interest Research Group, which pushed for the law that requires the disclosure.
“I’m not sure if this is bad press or bad bookkeeping, but I find it pretty surprising that overnight their denied claims went down 25,000,” he said “It’s a pretty dramatic drop and that’s quite a discrepancy between the filings.”
Cigna spokesman Jon Sandberg said it was a case of faulty records.
“After the filing, they went back in; they looked at it. The numbers didn’t look good to us, so we continued to look at it and discovered that the way the claims were coded, many were incorrectly labeled as denials, when in fact they had been paid or they were routed to a third party for payment,” he said. “We contacted Vermont and told them we felt the information was inaccurate.”
The new disclosure was submitted to the Vermont Department of Financial Regulation on June 2 at the request of the department, which identified inconsistencies in the company’s report. Commissioner of the department, Susan Donegan, declined to comment on Cigna’s third filing.
Cigna’s total denials fell from a total of 42,139 in its first two disclosures to 15,765 in its most recent. The denial rate fell from 21 percent to 7.9 percent. By comparison, MVP Health Care denied 15.5 percent of all claims in Vermont and Blue Cross Blue Shield of Vermont denied 7.6 percent.
Additionally, Cigna was the only health insurance company in Vermont to submit its annual disclosure after the March 1 deadline. The state and Cigna agreed to a $7,500 penalty for the tardy filing.
Sandberg said that in the disclosure’s inaugural year, Cigna had trouble adjusting to the state’s new requirements.
“Our claims system is largely built to pay claims and review claims and they don’t fit into state reports,” he said. “We consider this very important, but it’s a matter of learning the new report and learning how to collect the data accurately.”
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