RightChoice Managed Care, a St. Louis-based subsidiary of WellPoint, yesterday agreed to pay the U.S. attorney in St. Louis nearly $1 million to settle whistle-blower allegations that the health plan overcharged the Federal Employees Health Benefits Program, which is administered by the U.S. Office of Personnel Management.
The $975,000 settlement resolves a whistle-blower lawsuit filed by former RightChoice employee Ronald Ekstrand alleging that the plan illegally passed on excessive costs to the federal program in compensating a preferred-provider physician network. Federal prosecutors alleged that RightChoice, which operates through the Missouri Blues Service Benefit Plan, wrongfully paid higher fees to those doctors. Ekstrand, who formerly headed RightChoices federal employees program, will receive $165,000 for reporting the alleged fraud. RightChoice, purchased by WellPoint in 2002 for $1.3 billion, was Missouris largest managed-care plan. WellPoint merged with Indianapolis-based Anthem in a $16.5 billion deal completed in 2004.
RightChoice settled without admitting wrongdoing and denied the allegations. RightChoice does not believe that the agreement means any of our operational practices were improper and maintains that the physician fees at issue were reasonable and competitive with fees paid by other health plans in the same market, said RightChoice spokeswoman Deborah Wiethop. -- by Mark Taylor