While many health insurers have voluntarily pulled out of the Medicare+Choice program, Blue Cross and Blue Shield of Kansas City (Mo.) is being forced out as a condition of a fraudulent billing settlement.
The plan agreed to pay $1.9 million and to leave the Medicare+Choice program by Dec. 31 to settle allegations of more than 2,000 billing errors from April 1996 through March 1999.
The U.S. attorney's office in Kansas City accused the 810,000-enrollee Kansas City Blues of erroneously claiming patients lived in nursing homes when they did not. Medicare+Choice insurers receive a higher capitated payment for enrollees who live in nursing homes compared with those who live at home. An audit of 5,557 claims filed by the health plan turned up 2,223 such false claims, prosecutors said in a news release.
No criminal or civil charges were filed in the case, according to the release. Prosecutors would not disclose the amount they believe the Kansas City Blues plan, which admitted no wrongdoing in the case, was overpaid.
Kansas City Blues officials said in a statement that the company cooperated with the probe. They declined an interview request by Modern Healthcare.
The Centers for Medicare and Medicaid Services, then known as HCFA, suspected the billing problems after an on-site review conducted in March 1999, according to the U.S. attorney's office. The CMS notified the Kansas City Blues the next month, and shortly thereafter, the Blues agreed to stop marketing its two Medicare+Choice plans, Total Health Care 65 and Blue- Advantage 65, to new enrollees. The plans have a total of 7,400 enrollees.
The Kansas City Blues may reapply for the Medicare+Choice program, but if it does so within five years it must negotiate and sign a corporate integrity agreement, prosecutors said.