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WellPoint settles
with doctors over pay practices
MIAMI (AP) — WellPoint, the nation's biggest publicly
traded health insurer, said Monday that it will pay up to
$198 million to settle two class-action lawsuits brought by
representatives of more than 700,000 doctors over alleged
unfair payment practices.
The Indianapolis-based company said it
has agreed to pay $135 million to doctors and contribute $5
million to a non-profit foundation aimed at improving health
care for the disadvantaged. It also said it would pay legal
fees of up to $58 million, with the amount to be determined by
the court.
The physicians contended they have been
cheated by insurance companies that programmed computers to
pay for less-intensive services than were provided.
The settlement will result in a pretax
expense of $103 million, which will cut second-quarter
earnings by 10 cents a share after taxes. WellPoint is the
nation's leading health benefits provider, with 28.5 million
members. It operates mainly under the names Blue Cross and
Blue Shield.
If approved by U.S. District Judge
Federico Moreno, the agreement will settle two national
lawsuits against WellPoint Health Networks and Anthem, which
merged last year.
One lawsuit pitted a nationwide class
of physicians against national managed care companies, while a
second lawsuit was brought against the Blue Cross Blue Shield
Association and Blue Cross and Blue Shield companies,
WellPoint said.
Health Net, Prudential, Aetna and Cigna
previously settled with the doctors. UnitedHealth Group,
PacifiCare Health Systems, Coventry Health Care and Humana
remain as defendants, with the case set for trial in Miami in
January.
Moreno has ordered settlement
discussions with the defendants. But Kent Jarrell, a spokesman
for the remaining defendants, said the companies are
"vigorously" preparing and are "confident of
prevailing at trial."
"WellPoint obviously recognized
that a costly trial of any of the disputed issues with
physicians would not be in the interest of the company,"
said Archie Lamb, one of the attorneys for the doctors.
"This agreement advances a very basic principle: that the
physicians' input is a critical part of the health care
system."
Larry Glasscock, CEO of WellPoint, said
in a statement that the settlement is "a very important
step in further collaborating with physicians." The
statement did not acknowledge any wrongdoing by the company.
WellPoint shares rose 46 cents to close
Monday at $71.21 on the New York Stock Exchange.
Copyright 2005 The Associated Press.
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