Managed care payer First Health Group Corp., Downers Grove, Ill., says it will pay $5.5 million to the District of Columbia to settle charges of improper Medicaid billing against a subsidiary that predate First Health's ownership of that company.
The District will receive a total of $13 million from the settlement with First Health Services Corp., which First Health Group acquired in 1997. Previous owner First Data Corp., based in Greenwood Village, Colo., will pay the majority of the settlement amount, according to First Health Group.
The agreement stems from an investigation by the D.C. Office of Inspector General that determined that First Health Services between 1993 and 1996 made payments on behalf of D.C. Medicaid to HMOs and healthcare providers for patients no longer eligible for the program.
First Health Group says in a statement that District employees changed patients' Medicaid eligibility after services were delivered and benefits were paid.