Cigna Corp.'s healthcare division, Bloomfield, Conn., said it has settled a class-action lawsuit filed by physicians and other healthcare providers alleging that the insurer shortchanged them. Cigna said it would take an after-tax charge of up to $65 million in the fourth quarter to reflect its settlement of Kaiser vs. Cigna. The estimated charge is less than the overall settlement because Cigna expects its insurers to cover some of the costs. The actual settlement -- which plaintiffs' attorneys have estimated at $200 million -- depends on how many providers participate. As part of the settlement, Cigna agreed to appoint a third-party administrator to review claims denied since Jan. 1, 1996; to establish a $10 million "prompt pay" fund to compensate providers for late payments; and to change several practices to make it easier for doctors to do business with the company. The settlement, which requires court approval, can be downloaded at http://www.cigna-classaction.com. The lawsuit, originally filed in state court in Madison County, Ill., and recently moved to federal court, was slated for trial early next year. Cigna also is named in a much larger class-action suit around the same issues in Miami federal court. -- by Cinda Becker
Cigna settles doctors' suit, vows better relations
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