Humana 2003 Annual Report Download - page 27

treated our members. As a result of action by the Judicial Panel on Multidistrict Litigation (“JPML”), the case
was consolidated in the United States District Court for the Southern District of Florida, and has been styled In re
Managed Care Litigation.
The plaintiffs assert that we and other defendants improperly paid providers’ claims and “downcoded” their
claims by paying lesser amounts than they submitted. The complaint alleges, among other things, multiple
violations under the Racketeer Influenced and Corrupt Organizations Act, or RICO, as well as various breaches
of contract and violations of regulations governing the timeliness of claim payments. We moved to dismiss the
complaint on September 8, 2000, and the other defendants filed similar motions thereafter. On March 2, 2001,
the Court dismissed certain of the plaintiffs’ claims pursuant to the defendants’ several motions to dismiss.
However, the Court allowed the plaintiffs to attempt to correct the deficiencies in their complaint with an
amended pleading with respect to all of the allegations except a claim under the federal Medicare regulations,
which was dismissed with prejudice. The Court also left undisturbed the plaintiffs’ claims for breach of contract.
On March 26, 2001, the plaintiffs filed their amended complaint, which, among other things, added four state or
county medical associations as additional plaintiffs. Two of those, the Denton County Medical Society and the
Texas Medical Association, purport to bring their actions against us, as well as against several other defendant
companies. The Medical Association of Georgia and the California Medical Association purport to bring their
actions against various other defendant companies. The associations seek injunctive relief only. The defendants
filed a motion to dismiss the amended complaint on April 30, 2001.
On September 26, 2002, the Court granted the plaintiffs’ request to file a second amended complaint, adding
additional plaintiffs, including the Florida Medical Association, which purports to bring its action against all
defendants. On October 21, 2002, the defendants moved to dismiss the second amended complaint. On December
8, 2003, the Court denied the motion.
Also on September 26, 2002, the Court certified a global class consisting of all medical doctors who
provided services to any person insured by any defendant from August 4, 1990, to September 26, 2002. The class
includes two subclasses. A national subclass consists of medical doctors who provided services to any person
insured by a defendant when the doctor has a claim against such defendant and is not required to arbitrate that
claim. A California subclass consists of medical doctors who provided services to any person insured in
California by any defendant when the doctor was not bound to arbitrate the claim.
On October 10, 2002, the defendants asked the Court of Appeals for the Eleventh Circuit to review the class
certification decision. On November 20, 2002, the Court of Appeals agreed to review the class issue. The
appellate court heard oral argument on September 11, 2003, but no ruling has been issued. Discovery is ongoing,
and the Court has set a trial date of September 13, 2004. Also, on January 15, 2004, the Court filed a notice with
the JPML that will permit the JPML to decide whether the case should remain in Miami, Florida for trial or be
separately remanded for trial to the courts in which the actions were filed prior to their transfer to and
consolidation in Miami, Florida. In the case of the Company, that would be the United States District Court for
the Western District of Kentucky. In the meantime, two of the defendants, Aetna Inc. and Cigna Corporation,
have entered into settlement agreements which have been approved by the Court.
We intend to continue to defend this action vigorously.
Other
The Academy of Medicine of Cincinnati, the Butler County Medical Society, the Northern Kentucky
Medical Society, and several physicians filed antitrust suits in state courts in Ohio and Kentucky 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 violated the Ohio and Kentucky antitrust laws by conspiring to fix the
reimbursement rates paid to physicians in the Greater Cincinnati and Northern Kentucky region. Each suit sought
class certification, damages and injunctive relief. Plaintiffs cited no evidence that any such conspiracy existed,
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