The black cloud that's been hanging over Blues plans across the country got a little darker last week when the Massachusetts plan agreed to pay a $2.8 million fine to settle charges that it falsified Medicare reports to HCFA.
The plan is the second Blues plan in little more than a year to settle charges that it mishandled claims as a Medicare fiscal intermediary. In August 1993, Blue Cross and Blue Shield of Florida agreed to pay a $10 million fine to settle a claims dispute with the federal government (Aug. 9, 1993, p. 16).
The Massachusetts settlement also comes at a time of increasing federal, state and media scrutiny of the spending habits of many Blues plans.
Two months ago, for example, a Senate subcommittee accused the national Blue Cross and Blue Shield Association of failing to adequately police its member plans and of wasting government subsidies (Aug. 15, p. 3).
In Massachusetts, the Justice Department, as part of a whistle-blower suit filed by a former plan employee, accused Blue Cross and Blue Shield of Massachusetts of filing false reports with HCFA regarding its performance as the fiscal intermediary for Maine, Massachusetts, New Hampshire and Vermont.
Specifically, the government said the plan misrepresented and inflated the number of Medicare claims it was handling. The government said that resulted in HCFA overpaying the plan in 1991, 1992 and 1993 for its services.
In fiscal 1995, which began Oct. 1, the plan's contract with HCFA is worth $33 million. In fiscal 1993, the latest year for which figures are available, the plan handled about $3.5 billion in Medicare Part A and B claims.
Under the settlement, the plan admitted to no violation of federal law, but in addition to the $2.8 million fine it agreed to place a cap on its fiscal 1995 contract with HCFA. The government said the cap will save HCFA about $3.3 million.