Cigna battles hospitals' AI billing systems in escalating health care cost fight

Brian Evanko, Cigna's chief operating officer, emphasized that Cigna's medical stop-loss business is now performing in line with expectations and is not being crushed by sophisticated provider billing systems.

But Evanko and David Cordani, Cigna's chief executive officer, said they have certainly noticed providers' efforts to use new technology to bill for higher reimbursement levels.

"We engage in that in terms of hospital contracting and provider contracting engagement modifications," Cordani said.

Cordani noted that Cigna is also expanding its own AI and technology capabilities.

"Some of those capabilities help us to counteract, address and proactively engage very differently with some of the forces we're seeing," Cordani said.

Related: UnitedHealth predicts rising group health premiums will hurt enrollment

"There's no doubt affordability is pressuring everybody," Cordani added.

For employers, the new cost pressure is increasing interest in "what may have been deemed to be more disruptive solutions," Cordani said.

Cigna held the conference call to go over earnings for the second quarter, which ended June 30.

Cigna streamed the conference call live on the web and posted a recording on its website.

What it means: Quiet but intense battles are going on inside the computers that try to hold down employer-sponsored health plans' claim costs.

Arkansas: Cigna executives also talked about what they think about a new pharmacy benefit manager law in Arkansas.

The Arkansas law prohibits PBMs, including Cigna's Express Scripts business, from owning pharmacies in Arkansas. Express Scripts and other PBMs are fighting the law in federal court.

A judge granted a preliminary injunction blocking implementation of the law earlier this week and ruled that the law clearly violates the U.S. Constitution by seeking to protect local pharmacies from competitors based in other states.

"We're quite pleased with the expeditious and clear decision of the courts thus far," Cordani said. "The legislation, while potentially well-intended, is contrary to what we believe society needs."

Implementing the Arkansas law would increase the cost of prescription drugs, restrict patients' choices and break continuity of care, Cordani said.

Sales: Small employers are just starting to think about coverage for 2026, according to Brian Evanko, Cigna's chief operating officer.

"At larger employers, we're seeing elongated decision-making time frames," Evanko said. "Employers are seeking reassurance that their benefit decisions are appropriate, given the continued pressures on affordability."

Some employers are holding costs down by replacing fully insured plans with self-insured plans and switching to narrower networks, Evanko said.

Evanko also sees employers reducing the number of vendors they use to provide specific services, or "point solutions."

In some cases, Evanko said, the point solutions do little to save money or improve care, and some add administrative barriers that make it harder for patients to get care.

The earnings: Cigna is reporting $1.6 billion in net income for the second quarter on $67 billion in revenue, compared with $1.6 billion in net income on $60 billion in revenue for the second quarter of 2024.

The company ended the quarter providing or administering medical coverage for 18 million people, or 5% fewer people than it was covering a year earlier.

The number of people with fully insured employer plan coverage fell 2%, to 2.2 million.

The number in self-insured plans administered by Cigna increased 2%, to 14 million.