Cigna is working with an investment bank to evaluate options for its Medicare Advantage business, which could fetch several billions of dollars in a potential divestment, the sources said.
Cigna's Medicare Advantage business generated 4.4% of the company's $179.4 billion in revenue from external customers in 2022.
Cigna also said profit margins in Medicare Advantage in 2023 continue to be below its long-term target of 4% to 5%, which it expected to remain the case in 2024.
Cigna has said it expects changes to the government's star rating system, which informs some of the reimbursement decisions, will lead to a decrease in the rating of its Medicare Advantage business in payment-year 2024.
Cigna said in September it would pay about $172 million to settle charges from U.S. prosecutors that it overcharged the Medicare Advantage program by making patients appear more ill than they actually were.
Persons:
Andrew Kelly, Cigna, Goldman Sachs, David Carnevali, Bill Berkrot
Organizations:
REUTERS, Cigna, Reuters, Medicare, U.S . Centers, Services, U.S . Department of Health, Human Services, Thomson
Locations:
Queens , New York City, U.S, HealthSpring, Bloomfield , Connecticut, New York