U.S. District Judge Approves Cigna Class-Action Suit Settlement With Physicians

As expected, U.S. District Judge Federico Moreno yesterday granted preliminary approval to a proposed $540 million agreement to settle a class-action lawsuit filed by several hundred thousand physicians against Cigna for allegedly unfair reimbursement practices, the Miami Herald reports (Dorschner, Miami Herald, 9/5). The suit, filed on behalf of up to 600,000 doctors, alleges that eight health plans, including Cigna, engaged in a racketeering conspiracy by delaying or denying reimbursement for health services and by illegally rejecting claims for "necessary medical treatments" (California Healthline, 9/4). The settlement requires Cigna, which has already spent $400 million on internal changes, to pay physicians at least $70 million of the settlement amount for up to 12 years of reimbursements, the AP/Hartford Courant reports. The settlement allows physicians to seek funds -- an average of $100 per physician -- by either requesting reimbursement from a $40 million fund based on actual claims or splitting $30 million among doctors who choose an alternative not tied to claims (Wilson, AP/Hartford Courant, 9/5). There will likely be no limit on how many refiled claims will be paid to doctors who file them, and a third-party panel would review all renewed claims denied by Cigna. Cigna is also expected to establish a new $15 million foundation administered by state medical societies to deal with health-related issues important to doctors. The settlement amount includes cash payments for previously disputed claims, attorneys' fees and Cigna's investment in changing some of its reimbursement practices (California Healthline, 9/4). Aaron Podhurst, an attorney for the physicians, told Moreno, "I think America is going to be better off." John Harkins, an attorney for Cigna, said, "This settlement is very good for physicians, and because of that is good for patients" (AP/Hartford Courant, 9/5). Aetna, one of the health insurers named in the suit, reached a settlement agreement with the physicians in May. The companies that have not settled are United Healthcare, Coventry Health Care, WellPoint, Humana Health Plan, PacifiCare Health Systems and Anthem BlueCross Blue Shield (California Healthline, 9/3). The final decision on the Cigna settlement is scheduled for Dec. 18 (AP/Hartford Courant, 9/5). MPR's "Marketplace Morning Report" today reports on the settlement's approval. The segment includes comments from American Dental Association President T. Howard Jones (Ott, "Marketplace Morning Report," MPR, 9/5). The full segment will be available online in RealPlayer after the broadcast.