Cigna HealthCare Settles Lawsuits

December 14, 2004

Cigna HealthCare has settled lawsuits brought on behalf of a nationwide class of specialty health care providers and certain state and national associations by promising, among other things, to establish an $11.55 million fund to pay back claims.

The U.S. District Court in Miami must approve the agreement. The deal follows Cigna’s September 2003 settlement of similar class action suits filed on behalf of some 700,000 physicians across the country.

Health care providers covered by the settlement include chiropractors, psychologists, counselors, podiatrists, acupuncturists, optometrists, physical and occupational therapists, nurse midwives, nurse practitioners, nurse anesthetists, nutritionists, orthotists, prosthetists, audiologists, speech and hearing therapists and others.

While the exact size of the class is undetermined, Cigna (NYSE:CI) said it will send a settlement notice to at least 210,000 specialty health care providers.

The agreement calls for Cigna to, among other things:
• establish an $11.55 million fund from which class members can get compensation based on the volume of claims they submitted to Cigna over nearly 15 years;
• enhance its specialty health care provider claims processing and adjudication systems and processes;
• expand and improve its online referral, certification and claims management capabilities for specialty health care providers;
• provide detailed online information about Cigna’s specialty health care provider claim coding policies, fee schedules and related payment guidelines;
• in most circumstances, refrain from reducing its specialty health care provider fee schedules for participating providers more than once in a calendar year;
• implement an independent, external review process to resolve billing disputes fairly and expeditiously; and
• establish a specialty health care provider advisory committee to maintain open and frequent communication between Cigna and the providers and to address relevant issues and concerns.

Dr. W. Allen Schaffer, Cigna chief clinical officer, said the company’s principal imperative is to help health care providers achieve the best possible medical outcomes for members, which means they treat the whole person.

“This agreement makes it easier for us to work closely with specialty providers to meet that objective, ensure patient safety and deliver the high-quality care patients need and expect,” he said.

American Podiatric Medical Association President Lloyd S. Smith said by agreeing to the settlement, Cigna has taken steps to improve its relations with providers and the quality of care for its members.

The company said it already recorded charges related both to the newest settlement and the physician class action lawsuits settled earlier this year. Cigna said the newest settlement will have no additional impact on its financial results.

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