FOR IMMEDIATE RELEASE WEDNESDAY, OCTOBER 25, 1995

CIV (202) 616-2765 TDD (202) 514-1888

BLUE CROSS/BLUE SHIELD COMPANIES SETTLE MEDICARE CLAIMS, PAY UNITED STATES $117 MILLION, AGREE TO SHARE INFORMATION WASHINGTON, D.C. -- Sixty-seven Blue Cross/Blue Shield companies across the nation have paid the United States a total of $117 million to settle government claims that Medicare made primary payments for health care services that should have been paid by the Blue Cross/Blue Shield private insurance companies, the Department of Justice announced today. As part of the settlement, the companies also agreed to provide information in the future that will allow the federal government to identify, before Medicare makes payments, those situations in which the companies are liable for the payments, said Assistant Attorney General Frank W. Hunger, head of the Civil Division. Under the terms of the settlement agreement, the companies paid $27 million in cash and relinquished any claim to a refund of approximately $90 million they have paid pursuant to "data match" recovery efforts. "Data match" legislation permits the Health Care Financing Administration, the Department of Health and Human Services agency that administers Medicare, to match Internal Revenue Service and Social Security data to determine when private insurers are responsible for paying claims. The companies did not admit liability. Hunger said today's settlement was part of a broader enforcement effort by HCFA to enforce the so-called Medicare Secondary Payer laws. MSP laws require private insurers, such as the Blue Cross/Blue Shield companies, to pay primary benefits in certain circumstances where a person has medical insurance under both Medicare and an employer health plan, for example, when a person aged 65 or older continues to work and receives health care coverage through his or her employer. Provident Insurance Company, Blue Cross/Blue Shield of Michigan and the Travelers Insurance Companies also paid millions of dollars to settle individual suits making similar claims. "Congress passed the MSP laws to compel private insurance companies to assume a greater share of the nation's health care costs, particularly those of older workers and their spouses who are covered by an employer-sponsored health plan," said Hunger. "This settlement demonstrates the government's commitment to enforce these laws and protect the fiscal integrity of the Medicare system." In acting on behalf of HCFA, the Department sought to recover mistaken primary payments in situations where both the private insurance companies and Medicare provided health care coverage. "We are satisfied that the government has received fair and equitable compensation from the Blue Cross companies under this

agreement," Hunger said, emphasizing the importance of the provision requiring each of the 67 companies to share data with the government. The Department said this provision will permit significant future savings because it will enable the government to process Medicare claims more accurately and efficiently. ##### 95-551