Florida Judge Grants Injunction Against Cigna’s Settlement of Physician Class-Action Lawsuit
A federal judge in Miami yesterday granted an injunction against a settlement health insurer Cigna reached in Illinois federal court last month, dealing a "serious blow" to the company's attempt to settle its "massive" class-action lawsuit filed by physicians over payment practices, the Wall Street Journal reports. The plaintiffs' attorneys in the Miami lawsuit asked for an injunction because they claimed that the Illinois settlement was "woefully inadequate" for doctors and that Cigna had "inappropriately" reached a quick settlement with the Illinois court while the Miami case was ongoing, the Journal reports (Martinez, Wall Street Journal, 12/13). In the Illinois suit, physicians alleged that Cigna used a program called ClaimCheck to screen their claims for combinations of procedures and then eliminated or reduced payments for some of them, thus paying less than what the doctors billed. Cigna said the software helps eliminate unnecessary, erroneous or fraudulent claims, but doctors said the system "unfairly deprives them of legitimate fees." Under the settlement, Cigna will pay back claims to 600,000 to 700,000 physicians and other health care providers. In addition, the insurer will post explanations of its payment policies and claim coding system on its Web site and will appoint a third-party administrator to review claims that have been denied since Jan. 1, 1996 (California Healthline, 12/11).
Cigna had said that the Illinois settlement also would resolve claims from the Miami suit. That lawsuit alleges that Cigna and seven other HMOs -- Aetna, United Healthcare, Coventry Health Care, WellPoint Health Networks, Humana Health Plan, PacifiCare Health Systems and Anthem BlueCross BlueShield -- delayed or denied reimbursements for health services and rejected claims for necessary medical treatments as part of a racketeering conspiracy (American Health Line, 12/2).
In granting the injunction order yesterday, U.S. District Judge Federico Moreno took issue with Cigna's attempt to circumvent the Miami case and reach a quick settlement in an Illinois court. Moreno said his court "could not turn a blind eye to the underhanded maneuvers Cigna took to obtain this settlement agreement," the Miami Herald reports. Moreno ordered Cigna and "any party acting in concert with Cigna" to stop contacting the 700,000 doctors about the Illinois settlement (Dorschner, Miami Herald, 12/13). The injunction suggests that Cigna was not only "premature in suggesting its legal troubles" were over, but might have made a "serious error in legal judgment" by looking to settle the suit in another court, the Journal reports (Wall Street Journal, 12/13). Cigna officials did not say if they would appeal Moreno's decision. Cigna spokesperson Wendell Potter said, "While we haven't seen the order, we don't believe the injunction will affect the terms of the settlement agreement. ... What is at issue is which federal court will review and oversee the settlement. We remain prepared to demonstrate the fairness of the agreement to whichever federal judge is given the responsibility" (Miami Herald, 12/13).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.