Cigna Agrees To Settle Class-Action Lawsuit Filed by Doctors over Fee Bundling
Officials from Cigna Corp., one of the nation's largest health insurers, announced yesterday that the company has agreed to settle a class-action lawsuit under which doctors said the company was not forthcoming in telling them how they would be paid, the Chicago Tribune reports. The case stems from a lawsuit filed two years ago by Dr. Timothy Kaiser of Alton, Ill., who alleged that Cigna and other insurance companies were "shortchang[ing] physicians" by "bundling fees" (Japsen, Chicago Tribune, 8/23). "Bundling" involves paying for only one service even if a doctor says separate treatments were provided (American Health Line, 5/9). The case was certified as class-action lawsuit last year, and the claims against Cigna broadened after many doctors complained that the insurer's "take-it-or-leave-it" contracts often do not cover providers' costs. "Insurers mislead physicians by not providing the terms and conditions that they are actually going to employ and they change them arbitrarily without informing physicians," Dr. John Schneider, president of the Illinois State Medical Society, said.
Lawyers for the plaintiffs said that Cigna could be liable for up to $200 million in payments to the nearly 300,000 physicians it contracts with nationwide under its preferred provider plan. While Cigna spokesperson Wendell Potter confirmed that settlement negotiations were ongoing, he added that there is "no conceivable way Cigna would enter into an agreement that would cost the company $200 million." According to a letter the Illinois medical society sent its members Wednesday, physicians' claims will be reviewed back to 1996 to "correct coding errors" and other disputes over claims. Cigna officials have agreed to "regularly update" the company's Web site with updates on policies and procedures regarding physician payments and when coverage decisions are made, the letter indicates. The Tribune reports that it is not clear whether the other defendants in the case -- Blue Cross and Blue Shield of Illinois and Healthlink Inc. -- would follow Cigna's lead. Robert Kieckhefer, a spokesperson for Blue Cross and Blue Shield of Illinois, called the allegations groundless and said, "As far as we're concerned, our practices are consistent with our contracts" (Chicago Tribune, 8/23).This is part of the California Healthline Daily Edition, a summary of health policy coverage from major news organizations. Sign up for an email subscription.