CIGNA settles class-action suit on pay issues

The settlement, second of its kind, is expected to be worth about $140 million in cash to physicians.

By Tanya Albert, AMNews staff. Sept. 22/29, 2003.

CIGNA HealthCare this month settled a lawsuit filed by physicians, agreeing to implement some policies that give doctors hope that change is truly afoot at the large insurer.

The health plan agreed, among other things, to follow standard CPT codes; use standard clinical definitions of medical necessity; limit physician fee schedule changes to one per calendar year; and establish an e-mail procedure that lets physicians ask questions about fee schedules or claim coding.

CIGNA also said it would compensate an estimated 700,000 physicians nationwide in one of two ways.

Physicians can forgo resubmitting claims and share a $30 million fund that will be divided evenly among those who participate. If 700,000 physicians choose that option, each would receive less than $43.

Or physicians can chose to resubmit claims that were denied or paid at a reduced rate between Aug. 4, 1990, and Sept. 30, 2002. The company is setting aside a minimum of $40 million to pay physicians who choose this route, but since there is no limit on the amount that could be paid out under this option, that amount could go significantly higher.

In all, the actual cash settlement to doctors will be at minimum $85 million, with CIGNA expecting the final figure to be around $140 million. The health plan says other improvements in services will exceed $400 million.

U.S. District Court Judge Federico Moreno in the Southern District of Florida has given his preliminary approval to the settlement, and a final hearing is scheduled for his Miami courtroom Dec. 18. Physicians have until Nov. 20 to opt out of the CIGNA settlement.