Settlements Approved between HMOs and Doctors

By Cecilia Green

Published on September 28, 2005

Settlements for Health Net and Prudential have been approved in an ongoing class action lawsuit, which began in 2000 between 950,000 doctors and ten of the nation's largest HMO's.

In the lawsuit, doctors claimed that the healthcare companies were systematically underpaying them for their services.

U.S. District Court Judge Federico Moreno approved the settlements, which amount to $167 million.

According to the agreed upon settlement, Health Net will pay $40 million to both active and retired doctors, $80 million to improve the process of handling doctor and patient submissions, and $20 million in the physicians' legal fees.

Prudential also agreed to spend $22.2 million to improve managed care, and $5 million to help pay for the physicians' legal fees.

Since the lawsuit began, Aetna bought Prudential, and Anthem merged with WellPoint Health Networks, Inc.

WellPoint and Anthem have already agreed to tentative settlements.

The remaining four HMOs, Coventry, United HealthCare, Humana, and Pacificare are still negotiating.

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