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Highmark to Pay to Settle Medicare Claims

April 21, 2004

PITTSBURGH (AP) _ Highmark Inc. will pay $1.5 million to the federal government to settle potential civil claims over altered Medicare files.

The Pittsburgh-based insurer 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.

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

Highmark, the nation’s ninth-largest health insurer, came across the irregularities during an internal investigation into a separate Justice Department lawsuit filed last year, Weinstein said. The recent settlement regarding Veritus is not directly related to that case, which is still pending, Weinstein said.

In a civil complaint last year, the Justice Department accused Highmark of filing millions of dollars in false Medicare claims, and demoting an executive who sought to end the practice.

Highmark has had a series of run-ins with the Justice Department over Medicare, the government health program for seniors and people with disabilities.

In 1995, Highmark and 62 other Blue Cross and Blue Shield plans paid $27 million to settle nearly identical allegations that they misapplied 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, according to the Justice Department.

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