August 2004 Newsletter
Cigna Settlement
Physicians' National Class-action Settled
by
, Compliance Officer, Partner
Cigna agreed in a settlement dated 9/4/2003 to pay physicians an estimated $540 million dollars to settle claims against it in a national class-action law suit that alleges the company interfered with recommended treatment for patients and denied referrals to specialists. All appeals challenging the settlement were dismissed on April 21, 2004. Cigna was to notify physicians on July 8, 2004 of their right to request compensation from either the Category A Settlement Fund or the Claim Distribution Fund. Cigna is one of several health insurers named in the lawsuit that includes Aetna, Anthem, Cigna, Coventry Health Care, Humana, Pacificare, Prudential, and United Health Care, United Health Group, and Wellpoint. Aetna has already agreed to settle its lawsuit under similar terms and conditions.
Under the settlement Cigna will pay an additional $55 million in legal fees, $400 million to improve business practices, and $15 million to establish a foundation for the improvement of healthcare. The foundation is to be dedicated to "promoting high quality health care and will give particular emphasis to initiatives that assist physicians improve/enhance the quality of care received by patients and to enhance the delivery of care to the disadvantaged members of the public." (This foundation is similar in concept to the one established in the Aetna settlement.) The lawsuit is one of the largest in the healthcare industry and includes most of the estimated 700,000 practicing physicians in the U.S. and each physician will share the $70 million.
Who is eligible to apply for settlement funds?
Physicians, physician groups, and physician organizations who have not opted out of the Cigna settlement whose claims for payment for services to Cigna enrollees from August 4, 1990 through September 5, 2003 were reduced or denied by Cigna based on claim coding, bundling edits, or for medical necessity. Proof of Claims for services can only be submitted by the physician, physician group, or physician organization that originally submitted the claim and must use the same tax identification number that was used on the original claim. The deadline for submission of Proof of Claims is February 18, 2005.
What compensation is available?
An eligible provider who wants to seek remedy from this lawsuit can either request payment through the submission of the Proof of Claim Form(s) to Category A or one or more of the Claim Distribution Fund options.
Category A
An eligible provider is entitled to payment from the $30 million dollar Category A fund in accordance with the formula set forth in the settlement agreement. (The amount will depend upon how many providers apply for payment.) The providers may elect either to receive the payment from the Category A Settlement Fund or to direct that such amount be contributed to the foundation. No detailed proof/documentation is required to claim Category A compensation. The provider merely completes and signs a simple form.
Claim Distribution Fund
Cigna has established a Claim Distribution Fund to pay three categories of compensation to eligible providers affected by claim coding and bundling edits or medical necessity denials. Detailed proof (CMS-1500 forms, remittances and/or printed detail) is required in order to apply for payment from the Claim Distribution Fund. An eligible provider may submit the appropriate Proof of Claim for one or more of the following options:
- Category One Compensation is limited to a specific list of HCPCS (Category One Code list).
- Category Two Compensation is available for denials or reduction in payment based on claim coding or bundling edits other than those included on the Category One Code list
- Medical Necessity Denial Compensation is available only for denials of payments based on Cigna's judgment that services were not medically necessary,
experimental, or investigational.
The American Medical Association has a wealth of information regarding the settlement on
the AMA web site, including how to dispute current and future payments. The Notice of Commencement, Proof of Claims forms, and additional information is available at:
|
