Bulletin: November 30, 2005

Humana Settles Class Action Lawsuit

By: Corporate Compliance Officer

Humana Inc. and Humana Health Plan, Inc. agreed in a settlement October 18, 2005, to pay more than 58 million dollars to settle a national class action lawsuit. The suit alleges the company engaged in a conspiracy to improperly deny, delay and/or reduce payment to physicians by engaging in several types of allegedly improper conduct.

Humana is one of several health insurers named in the lawsuit that includes Aetna, Anthem/Wellpoint, Cigna, Coventry Health Care, Humana, PacifiCare, Prudential, United Health Care and United Health Group. Only three companies remain in the lawsuit: United HealthCare, Coventry, and PacifiCare. Trial could begin in April 2006 unless they reach settlements. A separate suit against many of the nation's Blue Cross and Blue Shield companies may also be pending.

Under the settlement, which still must be approved by the U.S. District Court in Miami, Humana will pay $45 million to a settlement fund for payments to physicians and $18 million in legal fees. Humana has undertaken systems and infrastructure improvements in connection with how they relate to providers, enhancing, among other things, the speed and accuracy of claims reimbursement to providers, setting the stage for real-time adjudication of claims filed electronically. The settlement recognizes that Humana has spent more than $75 million on these types of initiatives.

Court-imposed deadlines concerning the settlement:

• November 18, 2005: Deadlines to mail copies of the Notice of Class Action and Proposed Settlement to all potential Class Members.
• December 18, 2005: Deadline for legal notices to be published.
• January 18, 2006: Deadline to “Opt-Out” of the Humana Agreement
• January 18, 2006: Deadline for Objector’s papers to be filed/served
• February 17, 2006: Deadline for filing a claim.
• March 6, 2006: Settlement/Fairness Hearing.