Cigna and Anthem, two of the largest healthcare insurers in the USA, are attempting to merge. Anthem’s chief financial officer (CFO) Wayne DeVeydt announced his resignation on Wednesday (May 4), and Anthem stock quickly fell 3 percent. Does the resignation have anything to do with Anthem’s attempt to merge with Cigna? Apparently Anthem stockholders thought so.
Mr. DeVeydt’s resignation will take effect at the end of this month? His stated reason for the resignation is “family commitments and philanthropic work.” That sounds suspiciously like the reason that almost everyone gives when resigning because of a serious disagreements with management decisions.
As you may know, Cigna is currently prohibited by the federal government from signing up new clients for its Medicare Advantage and stand-alone drug plans or even advertising that it has such plans. The government, more specifically the Center for Medicare and Medicaid Services (CMS) pointed out a wide range of deficiencies in the way Cigna treats Medicare patients including delays and denial of coverage. According to CMS, before banning Cigna, it sent the company numerous notices of “non-compliance with CMS requirements,” but “Cigna has not corrected issues of noncompliance.”
I have been observing Cigna’s attempts to fix its computer systems for months, and I see little evidence of compliance. If I were in a major executive position in a company that was trying to merge with Cigna, I would also find “family commitments” for resigning my job. Who knows which other insurance markets Cigna will be banned from if it doesn’t straighten out its problems?