WELLPOINT INC. AGREES TO PAY ABOUT $198 MILLION TO SETTLE CLAIMS BY 700,000 DOCTORS THAT UNFAIR CLAIMS-REIMBURSEMENT PRACTICES SYSTEMATICALLY CHEATED THEM OUT OF FULL PAYMENT OF THEIR BILLS

For years, hundreds of thousands of doctors have claimed that many managed-care companies automatically cut their bills by using claims-reimbursement practices that simply paid what the insurers thought they should pay instead of what was actually charged.

These claims have been part of a six-year-old class-action lawsuit against several health insurers in federal District Court in Florida. Wellpoint, the largest of those companies with some 28.5 million plan members, has become the fifth to settle since May 2003.

Previously, Aetna Inc. (2003), Cigna Corp. (2003), Health Net Inc. (2005) and Prudential Insurance Co. of America (2005) had settled with the doctors in order to avoid going to trial in early 2006. Now, four defendants remain in the case. They are UnitedHealth Group Inc., Pacificare Health Systems Inc., Humana Inc., and Coventry Health Care Inc.

As is often the case with defendants in such class-action settlements, Wellpoint has not acknowledged any wrongdoing. Instead, it has described its decision to settle as a means to avoid the high cost, uncertainties, and distraction involved in continuing to defend itself. The settlement must be approved by U.S. District Judge Federico A. Moreno who is presiding over the case.

The remaining defendants maintain they have done nothing wrong and are prepared to go to trial in January 2006. That position may change, however, as the trial date draws closer and fewer defendants remain in the case.

The Wellpoint settlement includes a $135 million contribution to a fund to which previously disputed claims can be submitted, $5 million to a foundation to promote better health care and access for the disadvantaged, and up to $58 million in legal fees.

While the settlement is not significant in terms of the amount of money any particular doctor will receive, it is regarded as a step forward in the process of improving relations between physicians and the various companies and implementing a better system for resolving billing disputes by creating both a physician advisory committee and an independent claims-review board.

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