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CIGNA Hammers Out Managed Care Settlement

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NU Online News Service, Sept. 5, 2003, 5:23 p.m. – CIGNA Corp., Philadelphia, has received preliminary approval from U.S. District Court Judge Federico Moreno for a proposed settlement agreement that could resolve litigation with more than 700,000 doctors, according to an announcement from the lawyers who have organized the litigation.

The litigation organizers have filed suits accusing CIGNA and other managed care companies of working together to lower and delay payments to doctors in unreasonable ways.

The proposed settlement agreement calls for CIGNA to improve communications with doctors, and to clarify and streamline its system for handling claims. The parties involved estimate the changes in practices have a value of about $400 million.

CIGNA also has agreed to pay doctors a minimum of $85 million and to pay $15 million to a foundation that will focus on “health care issues important to physicians nationwide,” according to the litigation organizers.

Medical groups that support the CIGNA agreement include the American Medical Association, Chicago.

Earlier this year, Aetna Inc., Hartford, agreed to pay $100 million to the doctors, or about $140 per doctor, and contribute $20 million to a health quality foundation to resolve its share of the managed care suits now being heard on a consolidated basis in Miami. Lawyers began filing the suits in 1999. The federal courts put many of the suits under Moreno’s jurisdiction in October 2000.

Moreno plans to hold a hearing on final judicial approval of the settlement agreement Dec. 18.