Company: CI
Filing Date: 2025-02-27
Form Type: 10-K
Source: 0001739940-25-000009
Chunk: 580

Company: Cigna Group
Filing Date: 2025-02-27
Form: 10-K
Item: Item 8
Chunk 580
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 supporting benefit management.•Fee-for-service clinical solutions offered to clients, such as drug utilization management and medication adherence counseling help clients to drive better health outcomes at a lower cost by identifying and addressing potentially unsafe or wasteful prescribing, dispensing and utilization of prescription drugs, and communicating with, or supporting communications with, physicians, pharmacies and patients.•Wholesale Marketplace Drug Formulary Management services include either our drug formulary administrative service arrangements or our formulary processing arrangements. Drug formulary administrative services may include formulary consultation, administration of rebate contracts, rebate submission, collection from drug manufacturers and the distribution of rebates to clients. Services may also include facilitating audits of data submissions and reporting of rebates to clients.•Health benefit management solutions are offered primarily to sponsors of health benefit plans to drive cost reductions and improve quality outcomes for clients as well as provide behavioral health services to third-party health plans, employers and administrators. In certain arrangements, the Company assumes the financial obligation for third-party provider costs for medical services provided to the health plan's customers.Arrangements are generally short-term (one year or less) except for certain three-year health benefit management solutions contracts, and each consists of a single performance obligation. Performance obligations are satisfied as services are provided to clients, either on a stand-ready or utilization basis. Fees are billed, due and recognized at contracted rates on a periodic basis, generally monthly or agreed-upon arrangements terms. Fee revenues for services are generally recorded on a gross basis with the associated direct and indirect costs presented in Pharmacy and other service costs, or Selling, general and administrative expenses.Retained rebates reported in Fees and other revenues in our formulary processing arrangements are either recognized gross as services are provided to clients, consistent with the related service fee, or net as rebates are processed. The latter applies in arrangements in which the Company is permitted to retain a portion of rebates collected in exchange for services, but the Company does not obtain control of the retained rebate until rebates are transferred to the client. Fees for services may include variable consideration as a component of the transaction price, which is estimated at contract inception, recognized and adjusted through the contract period through Accrued expenses and other liabilities. Variable consideration includes certain health benefit management contracts requiring the Company to share the results of medical cost experience that differ from specified targets and ASO performance guarantees that compensate clients if certain service standards, clinical outcomes or financial metrics are not met.

Note 3 – Accounts Receivable, Net

Accounting Policy. We bill pharmaceutical manufacturers based on management's interpretation of contractual terms