CIGNA settles doctors' suit over unfair business practices.

Doctors challenging HMOs" business practices scored another victory when a second major insurer agreed to settle an d change the way it handles payments to and interactions with physicians. CIGNA Healthcare has promised to streamline its billing practices, improve communications with doctors, and submit to external third party review of billing disputes. The agreement is similar to a settlement that doctors reached with Aetna earlier this year.

Over 700,000 doctors have joined the class action, filed in federal court in Miami. Judge Federico Moreno gave preliminary approval to the agreement in September. The eight remaining insurers listed as defendants have appealed Moreno's ruling certifying the physicians' nationwide class. The Eleventh Circuit heard oral arguments on the issue just days after the CIGNA settlement was announced.

The doctors claim the insurance companies have reduced payments to them by using software to bundle and change codes for procedures and that they delayed payments of approved claims. (In re Managed Care Litig:, No. 00-1334-MD-MORENO (S.D. Fla. consolidated Oct. 23, 2000); Physician Suits Against HMOs Target Unfair Business Practices, TRIAL, Sept. 2002, at 16; Aetna Settles Suit Over Unfair Business Practices, TRIAL, Aug. 2003, at 74.)

CIGNA has promised fewer payment reductions, less "red tape" in claim procedures, and less required paperwork for standard claims. The company will also contribute to a medical foundation, pay attorney fees, and compensate the doctors. Physicians will he able to choose between two methods of payment: They can file a claim for a fixed amount from a compensation fired or resubmit disputed claims that are up to 12 years old.

At least 20 medical societies have endorsed the agreement.

Attorneys tot tire plaintiffs say that the improved business practices promised in the agreement will help doctors care for their patients better.