Federal Judge Approves Settlement in Lawsuit Filed Against Cigna on Behalf of Physicians
Officials for health insurer Cigna on Monday announced that Judge Federico Moreno of U.S. District Court in Miami has approved a $140 million settlement of a lawsuit filed on behalf of 700,000 physicians, the Bloomberg/New York Times reports (Bloomberg/New York Times, 2/3). The lawsuit alleged that 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. Cigna also will establish a new $15 million foundation administered by state medical societies to address health-related issues important to physicians (California Healthline, 12/19/03). In addition, Cigna will pay $55 million to the attorneys of the physicians. According to attorneys for the physicians, the changes in reimbursement practices at Cigna could "save doctors as much as $300 million by cutting paperwork and speeding up claims," Bloomberg/Times reports (Bloomberg/New York Times, 2/3). Under the settlement, "questions of medical necessity for services will be decided by doctors, a hot-button issue for doctors and patients," the AP/Fort-Lauderdale Sun-Sentinel reports.
Moreno called the settlement "fair, reasonable, adequate and proper." Cigna Chief Medical Officer Dr. W. Allen Schaffer called the settlement "a prescription for a stronger, more collaborative working relationship between doctors and Cigna." Tom Norbeck, the executive director of the Connecticut State Medical Society, praised the settlement and said that Cigna has set "a new standard for the industry" (Wilson, AP/Fort-Lauderdale Sun-Sentinel, 2/3).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.