Dive Brief:
Cigna has released a plan it says will make healthcare more affordable and accessible for its members — including tying executive compensation to customer satisfaction — as health insurers continue to reckon with discontent with their industry since the killing of a major insurance executive late last year.
Cigna plans to start linking bonus awards for high-level officers to the company’s net promoter score, a measure of customer loyalty and satisfaction, the Connecticut-based insurer said Monday.
Cigna will also invest in more care advocates, pare back hurdles to receiving care and make it easier for doctors to update patients on the status of prior authorization requests. Cigna also plans to release an annual “customer transparency” report starting next year with information on its business practices, including data on prior authorization requests, appeals and denials.
Dive Insight:
During a call with investors last week, Cigna became the latest insurer to promise it would reform its business practices, following in the footsteps of UnitedHealthcare and Elevance.
The pledges follow rising public anger and mistrust after UnitedHealthcare’s chief executive Brian Thompson was killed in Manhattan in early December. The shocking crime, which appears to have been motivated by anger with the health insurance industry, set off a wave of anti-insurer sentiment online.
Cigna is the first insurer, however, to provide specific next steps.
One of the most significant is factoring Cigna’s net promoter score into executive compensation. Reaching certain performance-based thresholds can have a big impact on how much executives bring home in a given year.
For example, 93% of Cigna CEO David Cordani’s compensation was based on reaching performance goals in 2023, according to the company’s most recent proxy statement.
That year, Cordani made $1.5 million in base salary and another $19.6 million from Cigna reaching certain performance benchmarks, bringing his total compensation to $21.1 million.
Before divvying out that extra cash, Cigna’s board looks at whether the company lowered medical and pharmacy costs, reduced voluntary turnover rates among women and minorities and increased how much revenue Cigna’s health services division Evernorth made from the company’s insurance clients, among other operational metrics, according to the proxy statement. Executive compensation is also heavily affected by the company’s financial performance.
Cigna declined to share how the insurer will factor NPS into executives’ compensation plans or whether the change will result in higher compensation for its leadership team.
Along with Cigna’s C-suite, bonuses for thousands of other executives will also depend on NPS, according to the company.
Cigna also announced that its health insurance business, which covers 17.5 million people mostly in employer-sponsored plans, will add more care navigation experts for members with complex conditions like cancer.
Cigna will invest to make it easier for members to resolve administrative issues with prior authorizations and claims, and improve a tracker that updates patients on the status of prior authorization requests, according to the release.
Cigna will also improve its digital portal for providers to make it easier for clinicians to communicate with the insurer electronically, with the goal of accelerating requests for care without increasing doctors’ administrative burden.
The initiatives follow a similar announcement from Cigna’s pharmacy benefit manager Express Scripts last week. The PBM, facing sharp scrutiny from lawmakers and antitrust regulators in Washington, said it would give more patients a lower price for prescriptions even if they haven’t reached their deductible and release more information on costs and pharmacy claims.
Starting early next year, Cigna plans to publish a report with details on its progress, including information related to “how the company facilitates customer care” like “details about its services and resolution statistics,” according to the release.
That includes metrics on prior authorizations — including requests, denials, appeals and overturns — along with turnaround time, the company said.
Cigna is also creating a new office to oversee the initiatives, called the Office of Excellence and Transformation, that will be led by Chris DeRosa, the head of Cigna’s government plans. DeRosa will report to David Brailer, Cigna’s chief health officer, in his new role.
Cigna declined to share how much it’s spending on the changes overall. However, the company has earmarked up to $150 million for the initiatives this year, executives said on the call with investors last week. It’s worth noting that $150 million is a drop in the barrel compared to Cigna’s $252 billion in projected revenue this year.
“The past several weeks have further challenged us to even more intensely listen to the public narrative about our industry,” Cordani said during the call, adding: “We know that more can be done within our health plan offering.”
Cigna’s stock rose slightly during Monday morning’s trade following the news.
