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CIGNA settlement
delivers for psychologists
(July
2006 Issue)
By Elinor Nelson
Speaking of the $11.5 million settlement between CIGNA and non-physician
health care providers, Russ Newman, J.D., Ph.D., says "This is a
disincentive to behave that way in the future." Newman is the American
Psychological Association's executive director for professional
practice. The settlement results from a class action lawsuit alleging
that 10 managed care companies conspired to reduce and delay payments
to providers; psychologists have gotten almost $2.2 million of the
settlement. Newman is "optimistic that other defendants will take
the lead from CIGNA, and settle as well." The deadline for filing
claims was May 2005.
This is a "mirror case," according to Newman, to a lawsuit filed
by physicians against managed care companies. Seven of 10 defendants
have settled in that case and the non-physicians are watching it
closely.
In both cases, the managed care companies were alleged to have
used "down coding" to reduce payments. This term means that the
companies systematically decreased reimbursements by changing CPT
codes to less remunerative services. The settlement with CIGNA calls
for the company to reform its services and policies as well as make
financial payments to the claimants. CIGNA will be using its Web
site to make various transactions with psychologists and other health
professionals easier and faster, while also making its operations
and procedures more transparent. Additionally, it will update the
listing of psychologists in its network.
The $11.5 million is being paid to a settlement fund to be split
among non-physician providers who offered services to CIGNA subscribers
or other defendants from Jan. 1, 1990 to 2004. About 17,000 claims
have been filed on behalf of mental health professionals. The APA
reports that 4,000 psychologists will receive settlement money,
with an average payout of $540. Even practitioners who did no work
for CIGNA were permitted to file claims as long as they had worked
for any of the other defendants.
CIGNA agreed to pay even providers who they hadn't contracted with
because of the conspiracy allegation. However, psychologists who
did not work for CIGNA received only $212.13. The highest payout
to psychologists, says the APA, was to a group that received $10,000.
Other named defendants were Humana, Health Net, Prudential, Pacificare,
Wellpoint/ Anthem, United Healthcare, Aetna and Coventry Health
Care.
"We're glad that some psychologists will be able to get reimbursed
for some claims that should have been rightfully paid to begin with,"
says Newman. "A case like this which results in an $11.5 million
settlement is significant money. This is more than just the cost
of doing business. They must have imagined that at trial it could
have been more."
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