Humana 2003 Annual Report Download - page 96

Humana Inc.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
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,
but based their allegations on assertions that physicians in the Greater Cincinnati region are paid less than
physicians in other major cities in Ohio and Kentucky.
On October 23, 2003, we entered into a settlement agreement with the plaintiffs that specified an increase in
future reimbursement we pay to a class consisting of physicians in a 12-county area in Southern Ohio and
Northern Kentucky over the next three years. We agreed to increase the reimbursement, in the aggregate, subject
to certain contingencies, that will increase the amounts paid for physician services over the amounts paid in 2003
as follows: $20 million in 2004, an additional $15 million in 2005 and an additional $10 million in 2006. The
agreement also provides for a committee to monitor our contracting practices for the period 2007 through 2010,
with reporting to us if any anticompetitive behavior is believed to have occurred. The agreement was approved
by the courts on December 30, 2003.
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 managed care industry purported class action litigation
described above. On September 21, 2001, the Texas Attorney General initiated a similar investigation. No actions
have been filed against us by either state. 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.
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