Medical societies are not disputing a $55 million payment to plaintiffs' attorneys as part of the societies' recent class action settlement with Cigna Corp., even though U.S. District Court Judge Federico Moreno recently questioned that amount.
In a hearing last Wednesday in Miami, where Moreno was asked to give final approval of the settlement, the judge said he had concerns about the amount of money going to attorneys, according to medical society executives who attended the hearing.
Moreno has not yet ruled on the final settlement and may not do so for weeks, the executives say.
At the hearing, the judge "wanted to make sure that the lawyers' amount is justified," says Jack Lewin, M.D., CEO and executive vice president of California Medical Association
Lewin tells Modern Physician that the 16 medical societies involved in the settlement are taking a neutral stand on the payments and he personally thinks the amount is "fair."
He says the amount of prospective relief to physicians in the Cigna settlement -- one measure for setting lawyers' fees -- is valued at more than $1 billion.
David Cook, executive director of the Medical Association of Georgia, tells Modern Physician that another measure for setting fees is the work done by the attorneys, which they itemized in detail for the hearing.
Cook, an attorney by training, says the Cigna lawsuits, initiated independently by each medical society, involved hundreds of attorneys from "two dozen law firms." These lawyers were involved in the Cigna cases at some point from their inception in many state and federal courts through their transfer to Moreno's federal court, he says.
Cook adds that $12 million of the attorneys' fees in the Cigna settlement is earmarked for attorneys who negotiated an earlier settlement with Cigna in Illinois, which was later dismissed by Moreno.
Cook says attorneys for both sides in the Cigna case decided the fee level on their own after the rest of the agreement had been finalized.
"We never knew about the attorney fees," Cook says. "It was never brought up to us."
But Cook adds that many of the same attorneys had just earned $50 million in payments as part of a similar class action settlement in October with Aetna. He says Moreno appeared to be concerned that the legal work in both cases overlapped at many points.
With further class action lawsuits with other health plans still to be settled, Moreno seems to be thinking that "we're getting to the point where the attorneys are already being compensated for the case," Cook says.
Lewin says he hopes Moreno will approve the fees, so that medical societies can get on with the settlement.
He says both the Cigna and Aetna settlements are expected to provide a total of more than $100 million for two healthcare foundations that will be run by the medical societies.
The foundations will offer grants for healthcare quality improvement, patient safety and other ways to improve healthcare delivery, he says.