Second Major Settlement in Landmark Case that is Leading to Massive Reforms in Healthcare Management

CIGNA and representatives of over 700,000 physicians, state and other medical societies received final judicial approval today of the sweeping settlement agreement in the national class action RICO lawsuit pending in the Federal Court for the Southern District of Florida. Miami, Fl.

The settlement agreement, entered into in September 2003, was in response to a lawsuit filed to combat widespread and chronic abuses by some of the nation's largest for-profit health maintenance organizations (HMOs). The suit identified CIGNA, as well as United Healthcare, Aetna, Coventry, Wellpoint, Humana Health Plan, Inc, Pacificare Health Systems, Inc, & Anthem Blue Cross Blue Shield as co-conspirators who have violated contracts and defrauded doctors in violation of the federal Racketeer Influenced and Corrupt Organization Act (RICO). Judge Federico Moreno granted preliminary approval of the settlement agreement in Miami in October.

Cigna is the second major managed care company to offer comprehensive reforms in the way they manage their dealing's with America's physicians. Aetna was the first to settle with physicians in May 2003; Judge Moreno issued final approval of the settlement on October 24, 2003. (Link to Aetna settlement release: http://www.hmocrisis.com/update_110303.html) The lawsuit against all other defendants continues before Judge Moreno.

The total settlement includes a guaranteed cash payment of $85 million. Additional business practice changes of $400 million are also included and will result in hundreds of millions of dollars in real savings to physician practices throughout the country. Including the savings in physician overhead costs the plaintiffs experts estimate the gross value of the settlement package in excess of $1 billion dollars.

Physicians and CIGNA begin a new era in health care with the development of support systems that will be put in place to encourage seamless patient-provider relations. The end result will leave doctors more time for patient care instead of dealing with what was a complex, cumbersome, and, at time fraudulent, system put in place by managed care.

* The settlement also establishes a foundation chartered to foster a broad range of public health improvement initiatives which will consider proposals to expand the database of health care information available to patients and providers and among other things, enhance the overall quality of patient care.

* CIGNA will establish a Physician Advisory committee through which physicians can offer input on ways to enhance to delivery of health care.

Tim Norbeck, Executive Director of the Connecticut State Medical Society, applauded the Court's decision and stated that, "CIGNA should be commended for standing up and agreeing to a settlement that sets a new standard for the industry and demonstrates CIGNA's openness and support of physicians and their patients. As we have continually made clear, our primary goal from the beginning has been to change the system and make it better for physicians and their patients. Our member physicians are pleased that many of their issues have been addressed by this settlement, and we believe that patients will benefit as well."

"Like the agreement Judge Moreno approved with Aetna, this settlement again puts doctors in the position to care for their patients and know that they're to get properly timely paid for their care," said Bohn Allen, MD, President-Elect of Texas Medical Association. "That will improve access for all patients to the care they deserve."

"This is the final chapter in a very lengthy series of procedures," said Dr. Jack Lewin, CEO of the California Medical Assn. "With the finalization of this settlement, we physicians look forward to working with CIGNA in the future to create a more equitable environment for doctors and patients. This is a positive step in the right direction."

"This is much more than a simple lawsuit." Said Archie Lamb, co-lead counsel for the class action suit. "The Aetna and Cigna settlements set a new standard of cooperation between insurance companies and doctors for the direct benefit of patients and our nations healthcare system in general."

"This is great for our clients, we can now move forward to implement the changes that make life so much better for doctors." noted Harley S.Tropin Co-lead Counsel

The case is being heard in the United States District Court, Southern District of Florida, Miami Division: MDL No. 1334; Master File No. 00-1334-MD-Moreno. Additional background information on the case can be found online at www.hmocrisis.com. That site includes a complete copy of the settlement agreement as well as the joint press release announcing the settlement.

AMA SUPPORTS CIGNA SETTLEMENT WITH NATION’S PHYSICIANS

Donald J. Palmisano, M.D., J.D.

AMA President

“The American Medical Association (AMA) supports the CIGNA settlement as approved yesterday by Judge Federico Moreno of the U.S. District Court in Miami. 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.

“This lawsuit, and others like it, have encouraged meaningful change to the current managed care environment. Health plans are now starting to realize their business practices must permit fair and open dialogue with physicians, and foster relationships between physicians and the patients they serve. 

“We commend the determination of the individual physicians and state and county medical associations involved in this settlement. This settlement demonstrates that these physicians and their medical associations are making a noticeable difference for patients and physicians.