CIGNA Reports Settlement of Class Action Lawsuits from Specialty Health Care Providers

December 13, 2004

CIGNA HealthCare said on Monday that it has reached a settlement in lawsuits brought on behalf of a nationwide class of specialty health care providers and certain state and national associations. The agreement must be approved by the United States District Court in Miami.

The agreement follows CIGNA HealthCare’s settlement in September 2003 of similar class action suits filed on behalf of some 700,000 physicians across the country.

“Our principal imperative as a provider of health and wellness benefits is to help health care providers achieve the best possible medical outcomes for our members – to help them treat the whole person,” said W. Allen Schaffer, M.D., CIGNA’s chief clinical officer. “This agreement makes it easier for us to work closely with specialty providers to meet that objective, ensure patient safety and deliver the high-quality care patients need and expect.”

The settlement encompasses and brings to final resolution all specialty health care provider claims asserted in various cases that were transferred to U.S. District Court in Miami. The health care providers covered by the settlement include chiropractors, psychologists, counselors, podiatrists, acupuncturists, optometrists, physical and occupational therapists, nurse midwives, nurse practitioners, nurse anesthetists, nutritionists, orthotists, prosthetists, audiologists, speech and hearing therapists and others.

While the exact size of the class is undetermined, a notice regarding the settlement will be mailed to at least 210,000 specialty health care providers.

Under the settlement agreement, CIGNA HealthCare will, among other things:

— Establish a fund of $11.55 million from which class members can obtain compensation in an amount based on the volume of claims they submitted to CIGNA HealthCare over a period of nearly 15 years;
— Further enhance its specialty health care provider claims processing and adjudication systems and processes;
— Continue to expand and improve its on-line referral, certification
and claims management capabilities for specialty health care
— Provide via the Internet detailed information about CIGNA
HealthCare’s specialty health care provider claim coding policies,
fee schedules and related payment guidelines;
— Refrain from reducing its fee specialty health care provider
schedules for participating providers more than once in a calendar year, in most circumstances;
— Implement an independent, external review process to resolve billing disputes fairly and expeditiously; and
— Establish a specialty health care provider advisory committee to maintain open and frequent communication between CIGNA HealthCare and the providers and to address relevant issues and concerns.

“We believe this agreement greatly benefits podiatric physicians and their patients now and in the future,” said APMA President Lloyd Smith, DPM. “By agreeing to this settlement, CIGNA has taken steps to improve its relations with providers and the quality of care for its members.”

CIGNA Corp. previously recorded charges related both to this settlement and the physician class action lawsuits settled earlier this year.

The settlement announced on Monday will reportedly have no additional impact on CIGNA’s financial results.

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