The Council of the Academy of Medicine of Cincinnati has given its approval to a settlement agreement proposed with Humana in the suit filed last year by the Academy and several other plaintiffs against four local insurers. In announcing the agreement Academy President, Esly Caldwell, M.D., applauded Humana's action to take the lead in helping to address some of the issues that prompted the suit. "There are significant issues affecting physician supply and patients' access to care in this community and this settlement is a positive step toward solving those problems."

According to Academy Executive Director, Russell Dean, the settlement contains two seminal features, one that addresses short-term concerns and the second, longer-term implications. "With the additional physician compensation that becomes available over three years commencing in 2004, physicians receive immediate relief regardless of their market clout and ability to influence negotiations. And, with the creation of an oversight panel, long-term and fundamental improvements can be assured into the future."

Cincinnati attorney, Stan Chesley, lead counsel for the Academy believes that, "this settlement is remarkable and can help show the way to where we need to be in restoring the dignity and prestige to the crown jewel that is our physician community, which will inure to the benefit of patients who call Greater Cincinnati home."

Using 2003 physician reimbursement rates as a base, Humana will increase the total physician reimbursements paid to doctors treating Humana/ChoiceCare patients by at least $100,000,000 over a period of three years (i.e., 30 percent increase from 2003 base).

As noted by Rick Wayne, co-counsel for the Academy, "The longer-term and perhaps most important aspect of the agreement is the establishment of a Compliance Committee that, beginning in 2007 and running through 2010, will monitor reimbursement rate negotiations between the physicians and Humana to ensure that the rates were not the product of anticompetitive activities, and that physician reimbursement rates do not return to pre-lawsuit levels."

Academy Councilor Roz Kade, M.D. reported that the Academy's governing body gave unanimous approval to the agreement after a lengthy meeting with our attorneys. "We are so pleased for our patients and our colleagues with this settlement which should help reverse the erosion of our physician community," she said. She further commented that "HumanaÕs approach to this problem through settlement of this litigation is commendable."

Having also been approved by the other plaintiffs, the settlement was presented to the court yesterday. Once the court grants preliminary approval, the agreement will be presented to all physician members of the class. Individual doctors will have the opportunity to accept terms of the settlement or opt-out, after which the court will conduct a hearing to determine the fairness of the settlement. That process could take several months to complete. Meanwhile, the lawsuit is proceeding against Aetna, Anthem and United HealthCare.