Cigna Expected To Settle Class-Action Suit Filed by Physicians
Cigna is expected to settle a class-action lawsuit filed by hundreds of thousands of doctors for about $500 million, according to a person familiar with the case, the Miami Herald reports. The preliminary settlement agreement, which is anticipated to be similar to one reached in May by Aetna, is scheduled to be presented to Miami U.S. District Court Judge Federico Moreno Thursday (Dorschner, Miami Herald, 9/3). Last September, Moreno approved class-action status for a lawsuit for up to 600,000 doctors suing HMOs -- including Cigna, Aetna, United Healthcare, Coventry Health Care, WellPoint, Humana Health Plan, PacifiCare Health Systems and Anthem BlueCross Blue Shield -- ruling that the HMOs "systematically obstruct, reduce, delay and deny payments and reimbursements to health care providers." The doctors allege that HMOs have engaged in a racketeering conspiracy by delaying or denying reimbursement for health services and by illegally rejecting claims for "necessary medical treatments" (California Healthline, 8/20). Under Aetna's settlement, the company will pay a total of $100 million to doctors, as well $20 million to establish a foundation to improve the quality of health care and $50 million to cover the cost of the legal fees of the plaintiffs. The settlement also will provide an estimated additional $300 million to physicians through improved automated systems that will eliminate some reimbursement reductions and expedite payments. In addition, Aetna will establish an independent "Billing Dispute External Review Board" to resolve disputes with physicians. The settlement also calls for Aetna to accept general treatment guidelines developed by the American Medical Association that require the company to base coverage decisions on the recommendations of physicians, rather than on the least expensive treatment among scientifically accepted procedures. Aetna admits no wrongdoing in the settlement (California Healthline, 5/30).
The Cigna settlement is projected to have no limit on how many refiled claims will be paid to doctors who file them, and should Cigna deny a renewed claim, a third-party panel would review the claim, the Herald reports. Refiled claims by retired doctors are anticipated to be capped at $30 million. Cigna is also expected to establish a new $15 million foundation to deal with health care issues, according to the Herald. Wendell Potter, a spokesperson for Cigna, did not confirm the agreement but said, "We are hopeful we will have a settlement on (Thursday) ... but, to my knowledge, there is not a signed agreement." Attorneys for the plaintiffs did not comment about the possible settlement. Kent Jarrell, a spokesperson for the health plans that have not settled, said, "Any proposed settlement has been worked on for many months, and it does not change the intentions of the remaining defendants to vigorously oppose the litigation" (Miami Herald, 9/3).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.