PHYSICIANS AND WELLPOINT

PHYSICIANS AND WELLPOINT, FORMER ANTHEM INC. AND WELLPOINT HEALTH NETWORKS INC. ANNOUNCE SETTLEMENT OF LANDMARK LITIGATION; - 07/11/05

Settlement will improve quality of health care, end administrative burden placed on physicians

New York, NY - Wellpoint, representing over 28.5 million members, and representatives of over 700,000 physicians, state and local medical societies announced today the settlement of the national class action lawsuit pending in the federal court for the Southern District of Florida before U.S. District Judge Federico Moreno.

Similar to earlier settlements with Aetna, Cigna, Prudential and HealthNet, this settlement provides a mechanism by which physicians can obtain compensation in connection with the claims brought in the lawsuits. Wellpoint will establish a settlement fund in the amount of $135 million from which physicians can seek compensation. Wellpoint will contribute $5 million to a not-for-profit foundation whose mission is to promote higher quality health care and to enhance the delivery of care to the disadvantaged and underserved.

The prospective relief requiring Wellpoint to implement important changes to its' business practices will result in significant savings to physicians in overhead costs and time spent contesting claims. The aggregate value of the company's expenditures and other changes to business practices is approximately $250 million. Additionally Wellpoint has agreed to pay legal fees to be determined by the court, not to exceed $58 million. Final judicial approval of the settlement agreement by Judge Moreno will extinguish liability for lawsuits filed against Wellpoint over the last decade by physicians and physician groups.

“Wellpoint obviously recognized that a costly trial of any of the disputed issues with physicians would not be in the interest of the company. This agreement advances a very basic principle: that the physicians' input is a critical part of the health care system,” noted Co-lead Counsel for the physicians, Archie Lamb.

"Quality of health care is maximized when physicians and patients work in concert with the insurer. This is good news as well for the employers that Wellpoint serves. To Wellpoint's great credit, it has elected to put behind prior differences with physicians. Hopefully this settlement by the nation's largest health insurer signals a new day of cooperation with physicians and helps forge a new constructive working relationship with them,” said Tim Norbeck, Executive Director of the Connecticut State Medical Society.

The California Medical Association (CMA) was a pioneer five years ago when it made the decision to take on the HMOs on behalf of their physicians. “This is a tremendous victory for physicians and their patients. It is a shame that other health plans are still delaying doing what is right for patients," commented Dr. Michael Sexton, M.D, CMA President.

“This settlement is a significant step forward for physicians and their patients,” said Dr. Jack Lewin, M.D., CEO of CMA. We hope it puts leverage on the other health plan defendants to move ahead and resolve this suit without the need for a protracted trial. Most important, settling the suits means we can spend our time and resources working together on quality of care, patient safety, and expanding access together-and that's where we need to be.”

"While not perfect, this settlement promises unfettered physician/patient communication when it comes to discussing treatment options with their patients," said John Antalis, M.D., President of the Medical Association of Georgia (MAG) and a Dalton family physician. "There is nothing more important than making sure that only patients and their physicians are decision makers when it comes to evaluating medical care options."

MAG was the first state medical society to sue the managed care industry over its inference with the doctor/patient relationship and use of improper payment practices. MAG previously reached settlement with Aetna, CIGNA and Prudential in the case.

"MAG's goal has always been to bring about positive change in the managed care industry for patients and to hold these insurance companies accountable when their business decisions interfere with patient care," said Executive Director of the Medical Association of Georgia, David Cook, "Doctors just want the freedom to take care of their patients."

"The physicians of Texas are delighted that yet another of the for-profit health plans has reached a settlement in this suit," said Robert T. Gunby Jr., MD, president of the Texas Medical Association. "Whether through settlement or an actual trial, the physicians of Texas are confident that this suit will help us overcome the obstacles that stand between our patients and the quality health care they need and deserve."

"The commitments obtained from Wellpoint in this settlement represent real progress in our ongoing efforts to ensure that physicians in this country are able to achieve the highest quality health care for patients in this country. We are pleased that Wellpoint has committed to these efforts," said Edith Kallas, partner with Milberg Weiss Bershad & Schulman in New York.

For additional details or to schedule an interview, please contact Audrey Mullen at 703-548-1160.

Archie Lamb will be available from Monday morning through Tuesday morning in New York City for in-studio interviews. He will be available in Miami from Tuesday afternoon through Wednesday night.

Mr. Lamb will conduct a conference call briefing on settlement details at 2:00pm EST today. Please email Audrey@advocacyink.com for telephone number and pass code if you wish to participate.

For immediate release
Contact: Audrey Mullen
July 11, 2005
ph. 703-548-1160, cell 202-270-2772