Company: CI
Filing Date: 2025-02-27
Form Type: 10-K
Source: 0001739940-25-000009
Chunk: 821

Company: Cigna Group
Filing Date: 2025-02-27
Form: 10-K
Item: Item 1
Chunk 821
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 is subject to compliance with CMS' numerous and complex regulations and requirements that are subject to administrative discretion, review and enforcement. For example, contracts with CMS for coverage of prescription drugs under Medicare Part D contain provisions for risk sharing, which affect our ultimate payments from CMS. Variances exceeding certain thresholds may require us to refund to CMS a portion of the payments we received. We expect federal and state agencies and third-party contractors, such as recovery audit contractors, to closely scrutinize our compliance with program and contractual requirements. Program terms and requirements may change because of rulemaking or enforcement activities, which could result in disruption in the marketplace. Noncompliance with these laws and regulations may result in significant consequences, including fines and penalties, enrollment sanctions, exclusion from the Medicare and Medicaid programs, limitations on expansion, restrictions on marketing our plans, corrections of improper payments and criminal penalties. 

CMS evaluates Medicare Advantage plans and Part D plans under its "Star Rating" system, which considers various measures adopted by CMS, including quality of care, preventive services, chronic illness management, coverage determinations and appeals, and customer satisfaction. Plans that perform very well are able to offer enhanced benefits, market more effectively and for longer periods of time than other plans, and obtain quality-bonus payments, with Medicare Advantage plans receiving a rating of four or more stars eligible for such payments. The Star Rating system is subject to change annually by CMS, which may make it more difficult to achieve and maintain four stars or greater. 

CMS provides risk-adjusted premium payments for Medicare Advantage plans based on our customer demographics and medical diagnoses, which may change based on the underlying health of our customers. Under the risk adjustment methodology, Medicare Advantage plans must collect and submit the necessary diagnosis code information from providers to CMS. We generally rely on 

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providers to appropriately document their claims and other submissions with appropriate diagnoses from which we extract hierarchical condition codes to submit to CMS as the basis for our payments. CMS conducts audits to validate the risk adjustment data submitted by health plans. 

In 2023, CMS issued a final rule ("Final Rule") on its audit methodology and related policies for Risk Adjustment Data Validation ("RADV"), which is currently being challenged in federal court. The Final Rule codifies that CMS will use a statistically valid method for sampling and extrapolation of error rates and a decision not to apply a fee for service adjuster when determining RADV audit findings. Audits for payment years prior to 2018 are not subject to extrapolation. RADV audits for our contract years 2011 through