Humana, Louisville, Ky., has agreed to pay $40 million to settle a class-action lawsuit brought by more than 700,000 doctors who claimed they were systematically cheated by many of the nation's major managed-care companies.
The lawsuit, filed six years ago, contends that managed-care companies programmed computers to pay for less-intensive services than were actually provided. The U.S. Supreme Court in June let stand a lower court ruling that the case could be tried as a class-action involving tens of thousands of active and retired doctors.
Humana also said it will pay as much as $18 million in legal fees if the settlement is approved by U.S. District Judge Federico Moreno in Miami federal court. Moreno has approved several other settlements in the long-running case, most recently those with Health Net and Prudential Financial Services. The remaining companies -- United Healthcare, Coventry and PacifiCare Health Systems -- could go to trial in January unless they also reach settlements.
The agreement recognizes that Humana has spent more than $75 million to upgrade its claims process, including improved speed and accuracy. "Humana is pleased that we have been able to reach an agreement to settle this litigation," said Michael McCallister, Humana's president and chief executive officer. "We have devoted significant time and resources to improving the quality and timeliness of our transactions with physicians who care for our health plan members."