Cigna Agrees To Settle Lawsuit Filed by Doctors Over Payment Practices

Cigna has agreed to settle a class-action lawsuit filed by physicians stemming from the way the insurer used a software program to automatically cut reimbursements, the Wall Street Journal reports. According to the suit, Cigna uses a program called ClaimCheck to screen doctors' claims for combinations of procedures and then eliminates or reduces payments for some of them. As a result, Cigna pays less than what was billed by physicians. While insurers said the software helps "root out" unnecessary, erroneous, or fraudulent claims, doctors said the system "unfairly deprives them of legitimate fees," the Journal reports (Martinez, Wall Street Journal, 11/27). As part of the settlement, which was approved Nov. 26, Cigna will pay back claims to 600,000 to 700,000 physicians and other health care providers. The settlement could cost the company up to $200 million (Goodrich, St. Louis Post-Dispatch, 11/26). Cigna will also 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 were denied since Jan. 1, 1996. The insurer will establish a $10 million "prompt pay fund" to reimburse doctors whose payments were late (Dale, AP/Hartford Courant, 11/28). Cigna has not admitted any wrongdoing; doctors have "hailed" the agreement as a "small but significant" victory in their effort to reform managed care organizations (Japsen, Chicago Tribune, 11/28).

Impact on Separate Class-Action Suit
Cigna has said its settlement in the class-action case also will resolve claims it is facing in other lawsuits that have been consolidated in a class-action suit pending in federal court, Bloomberg/Fort Lauderdale Sun-Sentinel reports (Snider, Bloomberg/Fort Lauderdale Sun-Sentinel). Filed by 600,000 doctors nationwide, the lawsuit alleges that Cigna and seven other HMOs delayed or denied reimbursements for health services and rejected claims for necessary medical treatments as part of a racketeering conspiracy. Cigna, Aetna, United Healthcare, Coventry Health Care, WellPoint Health Networks, Humana Health Plan, PacifiCare Health Systems and Anthem BlueCross BlueShield have been named in the suit (Kaiser Daily Health Policy Report, 11/22). According to some experts, Cigna's decision to settle the case involving its reimbursement practices will force other insurers to do the same. Cigna said its decision to settle that case "resolves" the outstanding racketeering claims. John Cannon, Cigna's chief counsel, said, "We would not have entered into this agreement if we were not confident that it would achieve a global resolution with respect to all of the principal claims in these cases." However, the physicians' attorneys said they will ask U.S. District Judge Federico Moreno to grant an injunction blocking the settlement, saying it is an attempt to circumvent the federal court's jurisdiction (Bloomberg/Fort Lauderdale Sun Sentinel, 11/30). Doctors also say the settlement in the other case does not address their concerns about health care rationing. "The terms and conditions of this settlement are woefully inadequate to resolve the complaints of misconduct on the part of managed care companies over the past decade," Archie Lamb, a lawyer for doctors in the federal class-action case, said (AP/Hartford Courant, 11/28).