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Insurer to pay $1.5 million to settle false claims with Medicare

Compliance Monitor, April 28, 2004

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Highmark Inc., the country's ninth largest health insurer, will pay $1.5 million to the federal government to settle potential civil claims over altered Medicare files, according to an April 21 Associated Press report.

The Justice Department complaint accused Highmark, based in Pittsburgh, of filing millions of dollars in false Medicare claims, and of demoting an executive who sought to end the practice.

Highmark went to the U.S. Department of Justice in 2001 to report irregularities within its Veritus Medicare Services division, a contractor that processes claims on behalf of hospitals, Highmark spokesman Michael Weinstein said in the report.

According to U.S. Attorney Mary Beth Buchanan, Veritus employees altered claims information to improve scores on Medicare evaluations between 1992 and 1994.

Highmark has had more than a few encounters with the Justice Department over Medicare. In 1995, Highmark and 62 other Blue Cross and Blue Shield plans paid $27 million to settle similar allegations that they falsely applied Medicare eligibility rules to shift more of their own costs to the federal government. Highmark's share of the payment was $6 million.

Three years later, Highmark paid $38.5 million to settle claims that its corporate predecessor, Pennsylvania Blue Shield, violated the False Claims Act by obstructing Medicare audits and failing to properly process claims.

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