Indianapolis-based AdminaStar Federal, the Medicare and Medicaid fiscal intermediary and carrier for Indiana, Kentucky, eight other states and the District of Columbia, agreed to pay $6 million to settle whistle-blower allegations that it overcharged Medicare and interfered in administrative evaluations, the U.S. attorney in Louisville announced. In the civil False Claims Act suits, which were filed in 1999 and 2000 by former employees, the government alleged that between 1991 and 1998 AdminaStar employees tampered with and altered Medicare claims and file information and hung up on customer-service phone calls in order to improve the company's evaluation scores and report shorter wait times. In addition the company allegedly doubled-billed Medicare for some administrative service claims.
CMS Administrator Mark McClellan said the settlement reinforces "the strong commitment that the CMS and the federal government have to ensuring that Medicare contractors properly perform their contractual obligations on behalf of Medicare beneficiaries." AdminaStar spokesman James Kappel said the alleged conduct dates back more than a decade and the practices in question were corrected years ago, adding that the company self-disclosed the alleged wrongdoing years ago to the HHS' inspector general's office and the U.S. Justice Department. AdminaStar is a subsidiary of WellPoint, which merged last year with Indianapolis-based Anthem. -- by Mark Taylor