SEATTLE-John Phillip Milne, owner and former chief of Bothell, Wash.-based Integrated Network Systems, the state's largest PPO, pleaded guilty last month to five counts of fraud, and agreed to pay $2.2 million in restitution to the federal government and two insurers overbilled by INS. Bremerton, Wash.-based Kitsap Physicians Services and Port Angeles, Wash.-based Clallam County Physicians' Services-two not-for-profit insurers-contracted with INS for discounted medical rates at hospitals. Milne admitted that he and INS lied about the amount of the discount and pocketed the difference. Between 1991 and February 1995, Milne skimmed more than $1.4 million from the two insurers. Milne also pleaded guilty to filing a false income tax claim and must pay $339,000 in back taxes, interest and penalties. A whistleblower informed a state and federal healthcare anti-fraud task force. The federal government got involved when it was discovered that some of the money INS skimmed off Kitsap came from claims reimbursed under the Federal Employees Health Benefits Plan. Sentencing is scheduled for July 26. Milne faces five years in prison for each offense.
SAN FRANCISCO-For the second consecutive year the Pacific Business Group on Health, formerly known as the Bay Area Business Group on Health, has negotiated a rate reduction from California HMOs. Thirteen of 15 health plans agreed to cut their rates beginning Jan. 1, 1996. The plans that agreed to the cuts were not identified, but among the original 15 were
Kaiser Permanente, PacifiCare Health Systems, Blue Cross of California and Blue Shield of California. The average reduction amounts to about 4.3%.
PBGH, which includes Chevron Corp., Pacific Telesis Group, Bank of America and several other large employers, negotiated a 9.5% rate rollback last year. Six more companies joined PBGH's Negotiating Alliance this year, raising its membership to 17 businesses representing 330,000 employees, dependents and early retirees, and $400 million in premiums.