Cigna 2009 Annual Report Download - page 187

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Ingenix. On February 13, 2008, State of New York Attorney General Andrew M. Cuomo announced an industry-wide investigation
into the use of data provided by Ingenix, Inc., a subsidiary of UnitedHealthcare, used to calculate payments for services provided by
out-of-network providers. The Company received four subpoenas from the New York Attorney General’s office in connection with
this investigation and responded appropriately. On February 17, 2009, the Company entered into an Assurance of Discontinuance
resolving the investigation. In connection with the industry-wide resolution, the Company contributed $10 million to the
establishment of a new non-profit company that will compile and provide the data currently provided by Ingenix. In addition, on
March 28, 2008, the Company received a voluntary request for production of documents from the Connecticut Attorney General’s
office seeking certain out-of-network claim payment information. The Company has responded appropriately. Since January 2009, the
Company has received and responded to inquiries regarding the use of Ingenix data from the Illinois and Texas Attorneys General and
the Departments of Insurance in Illinois, Florida, Vermont, Georgia, Pennsylvania, Connecticut, and Alaska.
The Company was named as a defendant in seven putative nationwide class actions asserting that due to the use of data from Ingenix,
Inc., the Company improperly underpaid claims, an industry-wide issue. Two actions were brought on behalf of members, (Franco v.
CIGNA Corp. et al., and Chazen v. CIGNA Corp. et al.), and five actions were brought on behalf of providers, (American Medical
Association et al. v. CIGNA Corp. et al., Shiring et al. v. CIGNA Corp. et al.; Higashi et al. v. CGLIC et al.; Pain Management and
Surgery Center of Southeast Indiana v. CGLIC et al.; and North Peninsula Surgical Center v. Connecticut General Life Insurance Co.
et al.). Six of the seven matters have been consolidated into the Franco case pending in the United States District Court for the
District of New Jersey. The consolidated amended complaint, filed on August 7, 2009, asserts claims under ERISA, the RICO statute,
the Sherman Antitrust Act and New Jersey state law. CIGNA filed a motion to dismiss the consolidated amended complaint on
September 9, 2009, which is now fully briefed and pending. Discovery is ongoing and class certification is scheduled to be briefed in
March and April of 2010. The one remaining class action that has not yet been consolidated in the Franco case is North Peninsula
Surgical Center, filed on July 6, 2009, in the United States District Court for the Central District of California, asserting claims under
ERISA, the Sherman Antitrust Act and state unfair competition law. The North Peninsula case was voluntarily dismissed on
September 29, 2009 and re-filed in the United States District Court for the District of New Jersey on November 12, 2009. The new
complaint includes ERISA and state law unfair competition claims only. The case is expected to be consolidated into the Franco case
in the near future.
On June 9, 2009, CIGNA filed motions in the United States District Court for the Southern District of Florida to enforce the In re
Managed Care Litigation settlement described above by enjoining the RICO and antitrust causes of action asserted by the provider
and medical association plaintiffs in the Ingenix litigation on the ground that they arose prior to and were released in the April 2004
settlement. On November 30, 2009, the Court granted the motions and ordered the provider and association plaintiffs to withdraw
their RICO and antitrust claims from the Ingenix litigation by December 21, 2009. The plaintiffs filed notices of appeal with the
United States Court of Appeals for the Eleventh Circuit on December 10 and 11, 2009, along with motions to stay the order pending
appeal. On January 12, 2010, the United States Court of Appeals for the Eleventh Circuit stayed the order pending resolution of the
appeal.
One of the provider plaintiffs, Pain Management and Surgery Center of Southern Indiana, filed a voluntary dismissal of its claims on
November 11, 2009.
It is reasonably possible that others could initiate additional litigation or additional regulatory action against the Company with respect
to use of data provided by Ingenix, Inc. The Company denies the allegations asserted in the investigations and litigation and will
vigorously defend itself in these matters.
INDUSTRY DEVELOPMENTS AND OTHER MATTERS
The disability industry is under continuing review by regulators and legislators with respect to its offset practices regarding Social
Security Disability Insurance (“SSDI”). There has been specific inquiry as to the industry’s role in providing assistance to individuals
with their applications for SSDI. The Company has received one Congressional inquiry and has responded to the information request.
Also, legislation prohibiting the offset of SSDI payments against private disability insurance payments for prospectively issued
policies was introduced but not enacted in the Connecticut state legislature. The Company is also involved in related pending
litigation. If the industry is forced to change its offset SSDI procedures, the practices and products for the Company’s Disability and
Life segment could be significantly impacted.