Physicians: Begin Gathering Your
RICO CIGNA Claims Documentation
[Posted 03/04/04]

Physicians who plan to elect the optional payment process and submit proof-of-claims under the CIGNA settlement should be ready to submit the required documentation soon. Physicians will receive detailed information on the claim submission process once all potential appeals are resolved, which will be next month at the earliest.

As you know, CMA reached a settlement in September with CIGNA, one of nine HMO defendants in the RICO case being heard in Miami by U.S. District Judge Federico Moreno. The settlement provides for several forms of relief to physicians, including a pro rata payment fund for those who do not choose to document claims, and additional funds for those who do.

The goal of CMA’s lawsuit is to prospectively change the practices of for-profit HMOs to ensure that managed care is fair and transparent. This settlement accomplishes that goal by, among other things, requiring CIGNA to make its fee schedules and payment rules available to physicians; adopt a clear “medical necessity” definition that will allow physicians to care for their patients without being second-guessed by insurance administrators; abide by fairer payment rules; not impose “all products” clauses; and establish an independent appeals process for physician billing disputes.

While CMA believes the greatest value of the CIGNA settlement lies in this prospective relief, estimated to be worth more than $400 million per year to physician practices, the settlement also provides a minimum of $70 million in damages to physician class members.

Physicians will be able to choose between the following two claims payment options:

Category A Settlement Fund (no documentation required): This $30 million settlement fund will be distributed to doctors on a pro rata basis. (Retired and deceased physicians, who will not benefit from the prospective relief, will receive twice as much as actively practicing physicians.) Physicians who elect to receive payment from this fund will not be eligible to receive funds from the Claim Distribution Fund, described below.

Claim Distribution Fund (documentation required): Physicians who are able to document that their claims were improperly downcoded, bundled, or denied based on medical necessity, are eligible to receive payment from this fund. To receive payment from the claim distribution fund, which has been set at a minimum of $40 million, physicians will have to submit documentation for each claim. This fund is uncapped and will be replenished by CIGNA as often as necessary to pay all valid proof-of-claims. For more information on the different compensation categories under this fund, click here.

Whichever option you choose, CMA encourages physicians to donate their portion of the settlement to the CMA Foundation. Donations are tax-deductible and will be used to support programs uniquely designed to help physicians and their patients, including the Medical Student Mini-Grant Program and the foundation’s efforts to address ethnic and racial disparities in health care.

Physicians may also elect to donate their settlement payment to the national foundation that was established under the settlement. CIGNA has agreed to contribute $15 million to this foundation.

Contact: CMA’s legal information line, 415/882-5144 or legalinfo@cmanet.org.