Humana settles 6-year physician class action litigation

Health benefits company Humana, Inc. has reached an agreement with representatives of more than 700,000 physicians to settle a nationwide class action suit that has been pending in U.S. District Court in Miami for more than 6 years.

Pursuant to the settlement, the company has agreed to pay $40 million to physicians and to pay up to $18 million in legal fees to be determined by the court. The company will record pretax expenses of approximately $72 million during the third quarter 2005 in connection with the settlement and other related litigation costs.

Humana said the settlement also recognizes that the company has spent in excess of $75 million on initiatives to strengthen collaborative relationships with providers.

"Humana has undertaken systems and infrastructure improvements in connection with how the company relates to providers, enhancing, among other things, the speed and accuracy of claims reimbursement to providers, setting the stage for real-time adjudication of claims filed electronically," said Michael B. McCallister, Humana's president and chief executive officer.