Article from BestWire Online

Anthem Blue Cross and Blue Shield plans in Ohio and Kentucky have reached a nearly $163 million settlement with Greater Cincinnati and northern Kentucky physicians to resolve lawsuits challenging the companies' reimbursement practices.

Judges in the Hamilton County Court of Common Pleas in Ohio and the Boone Circuit Court in Kentucky granted preliminary approval to the agreement, the Anthem plans said in a statement.

Other health insurers also were named as defendants in the suits, filed in 2002, Anthem said.

The plaintiffs, including the Academy of Medicine in Cincinnati, the Northern Kentucky Medical Association and several physicians, alleged that health-maintenance organizations - including Anthem, as well as Humana Inc.

(NYSE:HUM), Aetna Inc. (NYSE:AET) and UnitedHealth Group Inc. (NYSE:UNH) - conspired to pay physicians in the region less than other physicians were paid for the same procedures in similar communities in the United States (BestWire, Feb. 24, 2003).

Anthem spokeswoman Debbie Davis said the company's settlement raises total reimbursements for physicians in the Greater Cincinnati/northern Kentucky region by $160 million over the next three years. In addition, $2.75 million is to be used to create a charitable foundation to help physicians recruit other physicians to the region and to provide funds to bring medical care to the underserved, the company said.

"We believe this settlement is in the best interests of everyone, including physicians and our members, and builds on our close relationship with physicians," said Keith Faller, president and chief executive officer of WellPoint Inc.'s central region. WellPoint (NYSE:WLP), the company formed in the 2004 merger of Indiana-based Anthem Inc. and California-based WellPoint Health Networks Inc., is the parent company of the Anthem Blues in Ohio and Kentucky.

Stanley Chesley, lead counsel for the physicians, said Anthem's settlement encompasses nearly 2,000 physicians.

In December 2004, Aetna settled its portion of the suit, agreeing to increase physician reimbursements by $22.3 million over a three-year period, he said.

Two years ago, Humana's units - Humana Health Plan of Ohio and Humana Insurance Co. - resolved their liability in the case by agreeing to increase reimbursement to the physicians by about $45 million through 2006 (BestWire, Oct. 29, 2003).

UnitedHealth did not reach a settlement.

Cincinnati-area physicians, meanwhile, aren't immune from litigation, as they are accused of conspiring to strong-arm health insurers for higher fees. Cincinnati obstetricians and gynecologists who belong to the Federation of Physicians and Dentists are facing a government antitrust lawsuit filed earlier this year in U.S. District Court for the Southern District of Ohio that alleges they conspired to increase medical fees paid to them by health insurers (BestWire, June 28, 2005).

Anthem companies currently have Best's Financial Strength ratings of A (Excellent).

WellPoint's stock was trading at $76.39 a share on the afternoon of Oct. 4, up 0.74% from the previous close.