Special E-Mail Bulletin
December 2002
CIGNA class action settlement blocked
Special E-Mail Bulletin
Hi, everyone.
I've sent you several e-mail bulletins over the past year or so regarding the very important suits being brought in Miami against several of the nation's largest HMOs. And on November 27th I sent you a bulletin about a separate case in which CIGNA had agreed to settle physician claims in Illinois.
Now, however, that CIGNA settlement has been blocked by the judge hearing the larger case in Miami. As you'll read below, he opined that CIGNA's Illinois settlement was an attempt by that company to remove itself from potentially much greater liability in the Miami case.
Things are getting very, very serious -- it's definitely hard-ball time.
This story is from Reuters News Service, released yesterday.
Gil Weber
Federal Judge Halts Cigna Settlement With Doctors
By REUTERS
MIAMI, Dec. 12 (Reuters) - A federal judge late on Thursday blocked a deal to settle a class action lawsuit pitting Cigna Corp. against Illinois doctors, a move that could derail the No. 3 health plan's efforts to put the dispute behind it.
Federal judge Federico Moreno granted an injunction sought by doctors suing big health maintenance organizations, UnitedHealth Group Inc., Cigna and others, claiming the HMOs slashed fees arbitrarily and breached contracts.
The court "can not turn a blind eye to the underhanded maneuvers Cigna took to obtain this settlement," Moreno wrote, according to Archie Lamb, a lawyer for the doctors in a broad HMO class action lawsuits.
The judge's ruling blocks Cigna from pursuing its tentative pact with doctors in an Illinois federal court, a deal it hoped would quash its liability in the broader class action.
The doctors, who claim all HMOs slashed fees arbitrarily, objected to the Illinois physicians' deal with just Cigna earlier this month.
Cigna said it doesn't believe the order affects the terms of their settlement, said spokesman Wendell Potter.
"What is at issue is which federal court will review and oversee the settlement," Potter said.
Moreno now must rule separately on the proposed deal between doctors and Cigna, though isn't likely to look kindly on it. Moreno accused Cigna of "snookering" both courts in trying to settle its case by itself.
The suits exposed a rift among the doctors seeking to settle with Cigna, and those wanting to fight on for greater spoils in the bigger class action.
Nearly every big HMO is named in the more expansive class action proceeding toward trial in Miami.
Cigna, which admitted no wrongdoing, said earlier this month it would take a $65 million charge to settle the Illinois case.
Shares of the insurer closed on Thursday up 13 cents to $43.27 on the New York Stock Exchange. But the stock is off 53 percent since the start of the year, mostly on an earnings warning in October that led the U.S. Securities and Exchange Commission to open an inquiry.
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