Doctors ask court to compel Cigna to pay

A claims services company representing 50,000 physicians alleges that the insurer improperly delayed payments and interfered with the process laid out by the settlement.

By Mike Norbut — Posted Sept. 5, 2005

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When Martin Saltzman, MD, learned the terms of the class-action settlement a couple of years ago between Cigna Healthcare and more than 700,000 physicians, he started to think about the money he could have coming to him because of past claims being unjustly denied, bundled or downcoded.

Dr. Saltzman, an orthopedic surgeon from Schaumburg, Ill., said he had filed enough claims for past charges to expect about $20,000 from Cigna. To date, he has received $31.10.

"What's even more insulting to me is that they're getting away with it," Dr. Saltzman said.

Even after the settlement, physicians are fighting to receive the money they feel they have coming to them from Cigna, and some have taken their complaints back to court.

Managed Care Advisory Group LLC, a claims services company representing more than 50,000 physicians, including Dr. Saltzman, is backing a motion filed by one of its clients alleging that Cigna has violated the settlement agreement by improperly delaying payment and influencing the third-party administrator to deny claims.

The motion, filed by Texas Children's Pediatric Associates in U.S. District Court, Southern District of Florida in Miami, asks that Cigna be ordered to pay MCAG's claims in full and be completely removed from the claims process in the future, with an independent third party assuming its settlement responsibilities. A hearing on the matter has not yet been set.

Physicians and claims companies representing them have submitted more than $120 million in claims for past services they feel were not fully paid. Of that total amount, MCAG submitted about $104 million in claims, said Tim Schmidt, CEO of the Sylvania, Ohio-based company.

Cigna apparently has paid only about $18 million of those claims, including about $10 million to MCAG clients, Schmidt said. Instead, many of the claims have been rejected or marked as defective in some way.

Filing the motion "means we don't agree with the majority of what they have said is rejectable or defectable," Schmidt said. "We think that they are beyond their deadlines set by the settlement and they have unjustly interfered with the settlement administration process."

Individual physicians have noticed the problems as well. Rocky Wilcox, general counsel for the Texas Medical Assn., said members had been calling to say their claims had been declared invalid or defective.

"In our opinion, many of them are valid," he said.

The plaintiffs' motion claims that Cigna instructed Poorman-Douglas Corp., the administrator that was mutually selected as part of the settlement agreement, to use criteria not outlined in the settlement instead of instructions written into the agreement to determine if claims were invalid.

Further complicating the issue is a $6.375 million settlement Cigna apparently reached with another claims processing company, Dallas-based Redstone Financial Services LLC. The plaintiffs' motion alleges that that settlement, in which the insurer apparently agreed to pay nearly 80% of Redstone's claims, "unfairly treats class members differently" because Cigna did not also offer a similar deal to all physicians who submitted claims.

Redstone President and CEO James Reeder declined to comment. Cigna acknowledges the Redstone settlement in its response to the court, although it estimates that it paid only about 40% of Redstone's claims. Instead, the insurer's response focuses on what it calls MCAG's "wholesale misrepresentation of relevant events."

In a statement, Cigna spokeswoman Gloria Barone said the insurer disagreed with MCAG's complaints.

"In our view, the settlement process has been going smoothly," she said. "MCAG's assertions are largely based on their inaccurate understanding of the terms of the settlement agreement. The court will be addressing MCAG's claims."

In its court response, Cigna says the administrator's role is to serve as a gatekeeper to ensure that claims filed contain proper documentation, which it has been doing. The insurer also asserts that MCAG focused on submitting claims under a few narrow exceptions in the settlement agreement that did not require clinical records as supporting evidence, but most of the claims filed did not fit under those definitions.

But MCAG says Cigna should make the decisions about whether a claim should be paid, and the settlement allows for an independent review of rejected claims. "By forcing the settlement administrator to make the decisions Cigna is supposed to, Cigna has eliminated the appeal process approved by the court," the plaintiffs' motion reads.

Prospective relief

Early last year, the settlement between Cigna and physicians earned the approval of U.S. District Judge Federico Moreno in the Southern District of Florida. The agreement included payments for past claims that had been denied or downcoded, as well as provisions to make it easier for physicians to work with the insurer and receive payment for claims in the future.

While there are obvious disputes about past claims, Cigna has been "very receptive" to physicians concerns about claims going forward, said Nick Roth, a Decatur, Ala.-based attorney representing physicians in their class-action cases.

"I think they want physicians to know they're serious about complying," Roth said.

Physicians who have a dispute with the way that Cigna handled a claim can fill out a compliance dispute form available on the HMO Settlements Web site (link).

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