Humana 2002 Annual Report Download - page 84

Humana Inc.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
The Court has set a trial date of December 8, 2003.
Other
The Academy of Medicine of Cincinnati, the Butler County Medical Society, the Northern Kentucky
Medical Society and several physicians have filed antitrust suits against Aetna Health, Inc., Humana Health Plan
of Ohio, Inc., Anthem Blue Cross Blue Shield, and United Healthcare of Ohio, Inc., alleging that the defendants
have conspired to fix the reimbursement rates paid to physicians in the Greater Cincinnati and Northern
Kentucky region. The companion suits are filed in state courts in Ohio and Kentucky and allege violation,
respectively, of the Ohio and Kentucky antitrust laws. Each suit seeks class certification, damages and injunctive
relief. Plaintiffs cite no evidence that any such conspiracy existed, but base their allegations on assertions that
physicians in the Greater Cincinnati region are paid less than physicians in other major cities in Ohio and
Kentucky.
The Hamilton County Court of Common Pleas (Ohio) and the Boone County Circuit Court (Kentucky) have
denied motions by the defendants to compel arbitration or alternatively to dismiss. Defendants have filed notices
of appeal with respect to the orders denying arbitration. The Ohio court has agreed to stay proceedings pending
resolution of the appeal, and a similar request has been filed with the Kentucky court. The plaintiffs have filed
motions to certify a class in each case. The purported classes allegedly consist, respectively, of all physicians
who have practiced medicine at any time since January 1, 1992, in a four county region in Southwestern Ohio or
a three county region in Northern Kentucky.
We intend to continue to defend these actions vigorously.
Government Audits and Other Litigation and Proceedings
In July 2000, the Office of the Florida Attorney General initiated an investigation, apparently relating to
some of the same matters that are involved in the purported class action lawsuits described above. While the
Attorney General has filed no action against us, he has indicated that he may do so in the future. On
September 21, 2001, the Texas Attorney General initiated a similar investigation. These investigations are
ongoing, and we have cooperated with the regulators in both states.
On May 31, 2000, we entered into a five-year Corporate Integrity Agreement, or CIA, with the Office of
Inspector General, or OIG, of the Department of Health and Human Services. Under the CIA, we are obligated
to, among other things, provide training, conduct periodic audits and make periodic reports to the OIG.
In addition, our business practices are subject to review by various state insurance and health care regulatory
authorities and federal regulatory authorities. There has been increased scrutiny by these regulators of the
managed health care companies’ business practices, including claims payment practices and utilization
management practices. We have been and continue to be subject to such reviews. Some of these have resulted in
fines and could require changes in some of our practices and could also result in additional fines or other
sanctions.
We also are involved in other lawsuits that arise in the ordinary course of our business operations, including
claims of medical malpractice (both for direct negligence and for vicarious liability for negligence of network
providers), bad faith, nonacceptance or termination of providers, failure to disclose network discounts and
various other provider arrangements, and challenges to subrogation practices. We also are subject to claims
relating to performance of contractual obligations to providers and others, including failure to properly pay
78