A federal judge has approved a settlement agreed to in January, ending a class-action lawsuit filed against Minneapolis-based UnitedHealth.

Lawrence McKenna, United States District Court for the Southern District of New York, signed off on the deal, which stems from a suit filed by the American Medical Association, Missouri Medical Society and New York State Medical Society. Originally filed in March 2000, the suit alleged that UnitedHealth Group colluded with others to underpay physicians for out-of-network medical services.

The $350 million settlement is attached to a separate deal between UnitedHealth Group and the New York Attorney General Andrew Cuomo that stipulates that UnitedHealth will stop using a database from Eden Prairie, Minn.-based Ingenix Inc. to calculate physician reimbursements. The plaintiffs alleged that the Ingenix database was intentionally rigged to allow insurers to shortchange doctors.

“The court’s approval is an important step in finalizing a settlement that recognizes UnitedHealth’s flawed payment scheme resulted in significant damages to physicians who provided out-of-network care to patients enrolled with UnitedHealth,” AMA Immediate Past President Nancy Nielsen, M.D. said in a statement.

According to the court's preliminary approval order, a formal notice of settlement will be publicized and circulated to class members.

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