American Medical Association President Donald Palmisano, M.D., applauded the final settlement approved this week by U.S. District Court Judge Federico Moreno between Philadelphia-based Cigna HealthCare and some 700,000 physicians involved in class-action racketeering suits filed against it and seven other managed care companies.
"By agreeing to the settlement Cigna has recognized the importance of restoring its relationship with physicians, and working to implement necessary changes in how the company conducts its business with physicians now and in the future," said Palmisano in a news release.
"The AMA is hopeful that the remaining defendants from the health insurance industry will end their reliance on unfair business practices by agreeing to additional settlements, or by resolution of the pending litigation," Palmisano added. "The AMA will continue to support efforts on behalf of physicians to confront the unfair business practices of health insurers."
The suits were filed by 26 individual doctors and medical societies in 19 states.
In its settlement, Cigna agreed to spend $400 million on internal changes and pay at least $70 million to doctors on claims up to 12 years old, $55 million in attorneys' fees and $15 million to create a health care foundation. Moreno approved final settlement Monday. He granted preliminary approval Sept. 4.
Aetna reached a tentative agreement in May and Moreno approved the final settlement Oct. 24. Aetna agreed to pay $100 million to doctors, $50 million in plaintiffs' legal fees and expenses, $20 million for a new healthcare foundation run by the plaintiff medical societies as well as make changes in payment administration and physician relations valued at about $300 million.
According to W. Allen Schaffer, M.D., chief medical officer of Cigna HealthCare, the agreement "is a prescription for a stronger, more collaborative working relationship between doctors and Cigna. It puts us all on the same page in fulfilling a mission we all share -- protecting the health of people who depend on us for easy access to quality care."
In December, Moreno rejected motions by the remaining six payers to deny legal standing of the medical societies in the suits and reiterated a previous ruling that maintained the Racketeering Influenced and Corrupt Organizations Act, or RICO, was applicable to the case.
The remaining six are Coventry Health Care, Humana Health Plan, PacifiCare Health Systems, UnitedHealthcare and Wellpoint Health Networks.
Last month, Moreno ruled against the physicians' request to maintain a June trial date and delayed the trial start until Sept. 13.