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WellPoint to settle in physician disptute

Patient Financial Services Weekly Advisor, July 15, 2005

WellPoint, the nation's largest health insurer, announced a settlement July 11 with 700,000 physicians who had accused the company of underpaying hospitals and physicians and interfering in medical decisions.

Under the settlement, WellPoint will pay $198 million in cash and invest $250 million in information technology and procedural changes to resolve disputes with physicians and pay claims more promptly.

"This is a tremendous victory for physicians and patients," said Dr. Michael J. Sexton, president of the California Medical Association, which spearheaded the lawsuit. The suit accuses for-profit managed health care companies of "using coercive, unfair, and fraudulent means to control physician-patient relationships, violating federal law," the California association said in a statement.

Eighteen state medical societies joined in the suit, including groups in Connecticut, New Jersey, Florida, Texas, and Georgia.

With the agreement, six companies in a class-action suit filed by state medical societies five years ago have agreed to settlements totaling $590 million in cash, the New York Times reported July 12. The six include Aetna, Cigna, Health Net, and Prudential, which was acquired by Aetna, and now WellPoint and Anthem, which merged last year.

Four other defendants--the UnitedHealth Group and Pacificare, which announced a merger last week, and Coventry Health Care, and Humana--are scheduled for trial in January.

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