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Humana to settle doctors suit for $58M - 10/19/05

OCT. 18 8:51 A.M. ET Health care provider Humana Inc. said Tuesday it agreed to settle a class-action suit filed against the company by physicians alleging the company improperly paid providers' claims by paying lesser amounts than they submitted.

Under the settlement, Humana will pay $40 million to physicians and up to $18 million in legal fees to be determined by the court.

Humana said it will post a third-quarter charge of about $45 million, or 27 cents per share, related to the litigation.

Analysts surveyed by Thomson First Call forecast, on average, earnings of 51 cents per share for the third quarter.

In a statement, President and Chief Executive Michael B. McCallister said, "Humana has undertaken systems and infrastructure improvements in connection with how the company relates to providers, enhancing, among other things, the speed and accuracy of claims reimbursement to providers, setting the stage for real-time adjudication of claims filed electronically."

The settlement recognizes that Humana has spent more than $75 million on these types of initiatives.

The nationwide class-action suit represented more than 700,000 physicians and was originally filed against 10 health care companies. The case has been pending in U.S. District Court in Miami for more than six years. Among the companies that have already settled are WellPoint Inc., Aetna Inc. and Cigna Corp.

The agreement with Humana must be approved by U.S. District Judge Federico Moreno.

Humana will release its third-quarter financial results on Oct. 31.

VIEW THE HUMANA SETTLEMENT AGREEMENT:

PART1 | PART2 | PART 3 | PART 4

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