The federal government may order Blue Cross and Blue Shield of Massachusetts to suspend its sale of a new health insurance plan for senior citizens because the Blues admits submitting false documents about it.
HCFA told the Blues it would have to suspend marketing and enrolling for Blue Care 65 around March 7 unless HCFA feels the problem has been corrected.
Blues officials hope to persuade the federal agency not to take the action.
The insurer told the government that some doctor contracts submitted as part of its application for federal approval for Blue Care 65 had been altered by a Blues employee.
"We found the problem, we terminated the person responsible, and we reported it to the government," said Evelyn Murphy, Blues executive vice president.
Blue Care 65 is an HMO serving Medicare beneficiaries. The Blues gets a monthly payment from Medicare for each person it enrolls, and then is responsible for providing Medicare benefits to those people.
The federal government approved the sale of Blue Care 65 last month. To get approval, the Blues had to submit signed contracts with hospitals and doctors to show it had a network big enough to care for those who enrolled.
The Blues said about 30 of 4,000 contracts with doctors had been altered. The falsified contracts involved doctors in Worcester County who had signed letters of intent to join the Blues network. An employee deleted parts of the documents, making it appear the doctors had signed full contracts.
The Blues said it received 6,500 applications for Blue Care 65 after four weeks of advertising.
All the state's large HMOs have similar plans, and nearly 100,000 senior citizens have joined them.
Ava Chung of HCFA's Boston office said suspension of Blue Care 65 sales would last until the government investigated. She said the agency could change its mind about the suspension if the Blues shows it has corrected the problem.
Murphy said William Van Faasen, chief executive officer of the Blues, would try to resolve the problem in Washington.
A suspension would hurt those who want to enroll, she said.
In September 1994, the Blues agreed to pay the federal government $2.8 million to settle a healthcare fraud suit. The government said the Blues filed documents making it appear it was processing more Medicare claims than it was.
The Blues paid the settlement but didn't admit wrongdoing. It said a group of workers were trying to conceal that they were behind in their work and were missing deadlines.