Blue Cross Settles Medicare Fraud Charges With Government

On Monday, the Justice Department announced that one of the largest health care providers in the nation agreed to pay the United States millions of dollars for allegedly having knowledge of falsified data regarding cost report audits for Medicare.

Blue Cross of California (BCC) and its parent company, WellPoint Health Networks,  agreed to pay the United States $9.25 million. 

"This settlement demonstrates that the government will continue to aggressively pursue health care fraud not only by providers but also by intermediaries or other contractors who submit false or fraudulent information to Medicare," Robert D. McCallum, assistant attorney general for the Justice Department's Civil Division, said. 

The case arose from charges relating to BCC's processing of Medicare claims for the state. BCC was acting as a watchdog for Medicare fraud for the state and was responsible for auditing cost reports submitted by hospitals and other Medicare providers.

Medicare, the federal health insurance program for people ages 65 and up and people with disabilities, is expected to take on prescription drug coverage under a plan currently before Congress. The Senate is expected to reach a compromise by the end of the week.

A whistleblower case brought in the allegations, stating that BCC falsified audit activity dates to deceive the government into believing that the company had performed more audit work than reported during the pertinent fiscal year.

The performance of required audit work was one of the criteria used by the government to evaluate BCC's performance, and renew its contract, as a fiscal intermediary each year.

The U.S. Attorney's Office in Los Angeles and the Civil Division of the Department of Justice brought the allegations, which covered a 10-year period from 1990 to 2000. The office of the inspector general for the Department of Health and Human Services and the FBI helped in the investigation.