Doctors Suing Insurer Offer Settlement Deal

By Brian Vargo

Published on July 25, 2005

Doctors nationwide have accused WellPoint of continuously underpaying costs and placing the company's financial state ahead of patients' health.

WellPoint, the sixth of 10 insurance companies involved in the lawsuit is being offered a settlement agreement similar to those agreed to by other insurers.

WellPoint did not admit fault, but agreed to improve payment systems so doctors can spend more of their time focusing on patient care.

According to the agreement the insurer would be prohibited from using software programs that consistently downgrade treatments or refuse payments for multiple procedures performed on the same day.

In addition, the agreement requires that WellPoint pay for vaccines approved by physician boards and the federal government. The insurer would be able to allow a treatment that costs less than the doctor's recommendation, but only if it is just as effective.

If the agreement is approved by the U.S. District Judge in Miami, Federico Moreno, WellPoint will spend at least $250 million over a period of time to improve payment systems; pay doctors $135 million in damages; donate $5 million to a nonprofit organization; and pay up to $58 million in legal fees.

If approved, WellPoint will pay the settlement from their profits and will not increase patient premiums. WellPoint's net profit last year was $960.1 million.

The settlement will help doctors get what they have been unable to achieve through individual negotiations with the health plan.

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