NU Online News Service, Nov. 27, 10:13 a.m. – CIGNA Corp., Philadelphia, says its CIGNA HealthCare managed care unit has agreed to pay more than $50 million to settle a dispute with doctors over the way the company handles claims.
The proposed settlement would resolve Kaiser vs. CIGNA, a national class-action lawsuit filed in a state court in Illinois that recently moved to federal court. But the settlement agreement could cover the better-known suits now being heard in the U.S. District Court in Miami as well as suits in other state and federal courts, CIGNA says.
The court still must approve the settlement agreement, CIGNA says.
CIGNA estimates that the cost of the settlement would be about $50 million after taking savings on income taxes into consideration. But the estimate includes “insurance recoveries that CIGNA expects to receive,” CIGNA says.
CIGNA did not say how big the insurance recoveries might be.
Mike Dodge, a Dallas lawyer who has helped lead the legal team representing the doctors, predicts the cash payments to doctors will amount to at least $200 million.
Doctors have complained often over the years that managed care companies take too long to pay claims and give them too little information about how payments are calculated.
CIGNA HealthCare has agreed to respond to those complaints by taking steps such as posting more information about claim coding and payment policies on its Web site; appointing an outside administrator to review some claims that have been denied; establishing a $10 million “prompt payment” fund to compensate doctors who have received payments late; and eliminating requirements that providers submit copies of medical records to obtain payment for office visits occurring on the same day as separately billed surgeries.
“CIGNA continues to believe that its claims processing actions over the years have been appropriate and is not acknowledging any liability or wrongdoing by entering into the agreement,” CIGNA says in a statement about the proposed settlement agreement.