CIGNA settles massive managed care lawsuit

But physicians involved in cases moving through a federal court in Miami are challenging the agreement.

By Tanya Albert, AMNews staff. Dec. 16, 2002.

U.S. physicians who believe CIGNA HealthCare wrongfully denied claims they've submitted over the past six years could stand to recoup that money under a proposed settlement agreement in a class-action lawsuit that includes an estimated 400,000 physicians.

In complicated legal maneuvering that CIGNA hopes will clear up the other physician-filed state and federal lawsuits against it, CIGNA, in late November, settled a lawsuit originally filed by two physicians in state court in Illinois.

That lawsuit -- which accuses CIGNA of bundling, downcoding and arbitrarily denying claims -- was the first physician-filed lawsuit against an HMO to get class-action certification. It now stands to be the first lawsuit in which physicians will recover tens of millions of dollars and will see some changes in the way that a managed care company interacts with physicians on matters of billing.

"It's a great win for doctors," said Alton, Ill., otolaryngologist Timothy N. Kaiser, MD, who originally filed the lawsuit against CIGNA along with Irving, Texas, pediatrician Suzanne LeBel Corrigan, MD, because they were tired of getting the runaround when they billed for their services. "It demonstrates that individual physicians can make a big difference."

A federal court in Illinois still needs to approve the proposed settlement at a hearing scheduled for March 2003. Also, if 7.5% of physicians in the class decide to opt out of the proposed settlement, CIGNA or the physicians could withdraw it.

If the settlement does become final next year, the amount of money physicians would recover depends on how many of their past claims were wrongfully denied. [...]