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Travelers, UnitedHealth settle for $20.6 million without admitting wrongdoing

Compliance Monitor, August 18, 2004

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Two insurers settled civil Medicare fraud charges with the U.S. Attorney's office in New York City for $20.6 million, the Associated Press (AP) reported August 12.

The Travelers Insurance Co., a life insurance unit of New York-based Citigroup Inc., and United Healthcare Insurance Co., a division of UnitedHealth Group Inc. in Minnetonka, MN, agreed to settle the case without admitting or denying wrongdoing.

Under the terms of the settlement, Travelers will pay $10.9 million; United Healthcare will pay $9.7 million.

Travelers decided to "avoid the distraction of further litigation, and denies any wrongdoing in the case," Travelers spokesman Bob Nolan told AP.

The government alleged Travelers inflated its cost reimbursements above its actual expenditures under Medicare to obtain higher reimbursement and greater pay-for-performance payments between October 1988 and January 1995.

Travelers wore many hats then: It was the fiscal intermediary for Medicare programs in portions of Connecticut, Michigan, and New York; the Medicare carrier for Connecticut, Minnesota, Mississippi, and Virginia; the Railroad Retirement Board carrier nationwide; and the Durable Medical Equipment carrier for Connecticut, Michigan, and New York.

United Healthcare took over those contracts from Travelers in January 1995 and continued the improper billing practices through December 2000, prosecutors claimed.

The lawsuit was brought after a whistleblower came forward, AP reported.

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