Carrier pays $38.5 million in whistleblower suit

In yet another qui tam suit against a carrier, Highmark Inc. – the former Pennsylvania Blue Shield – has agreed to pay $38.5 million. The civil suit alleged that in the early 1990s, Pennsylvania BS had failed to process secondary payor claims; didn't recover overpayments from computer errors; failed to properly screen lab claims involving kidney disease; and manually overrode computer payment safeguards. In addition, the carrier was accused of obstructing a federal audit of its performance.

The case follows a $144 million criminal and civil settlement in July against Health Care Service Corporation, the former BC/BS Part B Illinois contractor. HCSC pled guilty to falsifying its performance data as well as obstructing an audit.

The Justice Department has also levied criminal charges against a former Pennsylvania BS vice-president. Judith Krafsig-Kearney was charged with making false statements to HCFA during audits of the contractor. Krafsig-Kearney has agreed to plead guilty and to cooperate in the investigation, according to prosecutors.