Special E-Mail Bulletin #2
November 2002
CIGNA to settle suit over improperly paid claims
Special E-Mail Bulletin
Here's additional information on suits filed against insurers who improperly delay, downcode, and deny claims. This one may have an impact on the class action suit I've written to you about in recent months, including a bulletin just a couple of days ago.
This is from the New York Times November 27th.
Gil Weber
Cigna to Take Quarterly Charge to Cover Class-Action Lawsuit
By REUTERS
CHICAGO, Nov. 26 (Reuters) -- The Cigna Corporation said today that it would take a fourth-quarter charge of up to $65 million to settle a dispute with doctors claiming the insurer cheated them out of reimbursements.
Cigna said the tentative settlement of the federal class-action lawsuit would lead to an after-tax charge of $50 million to $65 million in the current quarter to pay for insurance related to the settlement.
Nearly 300,000 doctors, hospitals and others had accused Cigna of arbitrarily cutting payments by engaging in practices like down-coding, or paying out less than what the service provided by a doctor was worth.
Cigna said its goal had been to "make it easier for doctors to do business with the company."
Cigna, which admitted no wrongdoing, said it would appoint a third party to adjudicate claims by the doctors and set up a $10 million fund to cover late claims.
A lawyer for the doctors said she hoped the deal would spur other health insurers to reconsider such practices. Doctors also accused Cigna of bundling claims, or adding them together and reimbursing less for them.
"The problem is national in scope," the lawyer, Judy Cates, said in an interview. "It's a win for the doctors because they are promised significant changes in Cigna's policies."
Cigna will end the practice of requiring doctors to submit claims on the same day separately and it will pay interest for late claims.
A court has given preliminary approval to the settlement of the suit. The lawsuit was the first nationwide class action to be certified, according to the Illinois Medical Society, which was involved in fact-finding.
In a statement, Cigna said that if the agreement was approved, it would resolve most of the claims brought on behalf of health care providers in other courts, including the cases consolidated in federal court in Miami.
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