WellPoint Announces $198 Million Settlement Agreement

By Trevor Thomas

July 11, 2005 at 08:00 PM

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WellPoint Inc. says it has negotiated a settlement agreement that could resolve litigation with about 700,000 doctors.[@@]

WellPoint, Indianapolis, is a managed care company that provides or administers health coverage for 28 million Americans.

Lawyers have filed suits accusing WellPoint and other managed care companies of working together to lower and delay payments to doctors in unreasonable ways. The courts have consolidated the litigation in Miami under U.S. District Court Judge Federico Moreno. The court must approve WellPoint's provider settlement before it can take effect.

The settlement agreement calls for WellPoint to pay $135 million to physicians and to contribute $5 million to a nonprofit organization devoted to promoting better health care for poor and uninsured patients.

The agreement also calls for WellPoint to pay up to $58 million in legal fees.

WellPoint expects to record about $103 million in expenses in the second quarter to cover the cost of implementing the agreement, the company says.

WellPoint, formerly known as Anthem Inc., acquired WellPoint Health Networks Inc., Thousand Oaks, Calif., through a merger in 2004. If the court approves the settlement agreement, the agreement will resolve a suit against Anthem Inc. as well as a suit against WellPoint Health Networks, WellPoint says.

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