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Wellpoint Inc.’s recent $200 million settlements with 700,000 doctors and 18 medical societies will not put an end to the six years of litigation against the largest health maintenance organizations in the country. Six defendants have settled�including Philadelphia-based Cigna Corp. and Hartford, Conn.-based Aetna Inc. But the remaining defendants insist they will go to trial on Jan. 23, 2006. They are Maryland-based Coventry Health Care, Kentucky-based Humana and Minnesota-based United Health Group�which recently merged with another defendant, Orange County, Calif.-based PacificCare. The class action consolidated a series of suits that were brought around the country. In re Managed Care Litigation, MDL No. 1334 (S.D. Fla.). The suits allege violations of the Racketeer Influenced and Corrupt Organizations Act, and allege that the companies conspired to create systematic claims processes that manipulated doctor billing codes to automatically lower their payment value. That software, it is alleged, also manipulated codes so that if a doctor performed multiple procedures, the company would pay for just one. The suit claims that each defendant verbally agreed to participate in the conspiracy and that they collectively exercised their overwhelming economic power to coerce the class. The July 11 WellPoint settlement, like the previous settlements, will improve patient treatment as well, asserted Archie Lamb, co-lead counsel for the plaintiffs. “The settlements have brought efficiencies in addition to putting decisions about patient treatment back in the hands of treating doctors,” said Lamb of Birmingham, Ala.’s The Lamb Firm. “The companies’ contracts used to say ‘medical necessity’ is whatever we [the company] says it is. We fixed that.” The defendants that settled denied any wrongdoing, including allegations of fraud and conspiracy. “The reason that the trial lawyers have become conspiracy theorists is that this was the only way they could manage to join a large number of health benefits companies into one lawsuit,” asserted Jeffrey Klein of Weil, Gotshal & Manges, counsel for UnitedHealth Group, speaking on behalf of the remaining defendants. “The notion that there is a conspiracy is absurd,” Klein said “After years of discovery, plaintiffs’ lawyers can’t point to any joint activity or collective behavior by these companies. This is hardly surprising since [the companies] are fierce competitors.” The proposed settlement with Indianapolis-based WellPoint-the largest publicly traded health benefits company in the country based on its 28 million membership-mirrors earlier settlements with other national health-benefit companies. For example, under the terms of the WellPoint agreement, the company is bound by doctors’ diagnostic and treatment plans unless a less costly plan of action “at least as likely to produce equivalent therapeutic or diagnostic results” is available based on “credible scientific evidence published in peer-reviewed medical literature.” The proposed settlement also calls for more transparency in WellPoint’s decision-making and mandates, among other things, a regular analysis of claims denials. U.S. District Judge Federico Moreno in Miami has not yet approved the WellPoint settlement. This week, he is expected to hear summary judgment and other motions. But the other four defendants say they are waiting for their day in court. “We are confident of prevailing,” Klein said. The health-benefits companies that were sued in the case have radically different ways of doing business, and use different computer systems and software to process claims, he said. “The facts are that more than 90% of all doctor bills are paid exactly as submitted and within 30 days of their submission by doctors,” Klein said. “Disputed bills constitute less than 1% of the millions of claims submitted each year.” $58 million in attorney fees As part of its settlement, the parties estimate that WellPoint’s investment in the redesign of its information and bill-paying systems will exceed $250 million. That figure includes money spent since 2000 and future costs over the next four years. The company also agreed, among other things, to put $135 million into a fund from which doctors could be reimbursed for disputed claims. The plaintiffs’ counsel seeks $58 million in attorney fees. If the judge approves the WellPoint settlement, the payout by the companies that have settled will be $367 million for doctors, $45 million for the foundation to improve medical practices and $183 million in attorney fees. A WellPoint spokesman noted that the settlement resolved the litigation against both its premerger companies-Anthem Inc. and WellPoint Health Networks. Another lawsuit brought against 65 regional HMOs in which the allegations are nearly identical to the WellPoint litigation is at a much earlier stage. That suit, which is before the same judge, has not yet been certified as a class action. Thomas v. Blue Cross and Blue Shield Ass’n, No. 03-21296-CIV (S.D. Fla.).

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