Federal Court Upholds Cigna’s Settlement With Physicians

A federal appeals court upheld a $540 million settlement between Pennsylvania-based Cigna and about 700,000 doctors nationwide, ending the insurer's part in a "massive racketeering lawsuit" against the managed-care industry, Reuters/Los Angeles Times reports (Reuters/Los Angeles Times, 4/23). Judge Federico Moreno of U.S. District Court in Miami in February approved a $140 million settlement of a lawsuit that alleged Cigna and other health insurers delayed or denied reimbursements to physicians and illegally rejected claims for "necessary medical treatments" as part of a racketeering conspiracy. The settlement, reached in September, requires Cigna, in addition to $400 million previously spent on changes to company reimbursement practices, to pay physicians at least $70 million of the settlement amount for as many as 12 years of reimbursements. In addition, Cigna will establish a new $15 million foundation administered by state medical societies to address health-related issues important to physicians and will pay $55 million in attorneys' fees to the physicians' lawyers (California Healthline, 2/3). According to the Times, a "small group" of physicians did not agree with the terms of the settlement and sought to "derail" it through further legal action. In May, Aetna, the only other insurer to reach an agreement with the doctors, settled lawsuits for $470 million. A trial in Miami will being in June for the remaining defendants, which include Humana Health Plan, PacifiCare Health Systems, Prudential Insurance, UnitedHealthCare, WellPoint Health Networks and Foundation Health Systems (Reuters/Los Angeles Times, 4/23).