FOR IMMEDIATE RELEASE CIV

FRIDAY, SEPTEMBER 29, 1995 (202) 616-2765

TDD (202) 514-1888

TRAVELERS PAYS U.S. $10 MILLION TO SETTLE SUIT

WASHINGTON, D.C. -- The Travelers Insurance Company has paid

the United States $10 million to settle a lawsuit alleging that
Medicare made primary payments for health care services that the
government contended that Travelers should have paid, the
Department of Justice announced today.
Assistant Attorney General Frank W. Hunger, head of the
Civil Division, said today's settlement was part of a broader
enforcement effort by the Health Care Financing Administration to
enforce the so-called Medicare Secondary Payer laws. Provident
Insurance Company paid the government $27 million and Blue Cross
and Blue Shield of Michigan paid $23 million to settle similar
suits.
"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."
Acting on behalf of HCFA, a Department of Health and Human
Services agency, the Department sued to recover mistaken primary
payments in situations where both Travelers and Medicare provided
health care coverage. Under the terms of the settlement
agreement, Travelers did not admit liability but agreed to pay
$10 million to settle the case.
MSP laws require private insurers, such as Travelers, 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 coverage through his or her employer.
Since initiation of these enforcement efforts, Congress has
enacted "data match" legislation which now permits the Health
Care Financing Administration to match Internal Revenue Service
and Social Security data to determine when private insurers are
responsible for paying claims.
"We are satisfied that the government received fair and
equitable compensation from Travelers today," Hunger said. "We
also want to point out that under the settlement, Travelers has
agreed to share data with the government. This will result in
significant future savings because it will enable the government
to process Medicare claims more efficiently."
Today's agreement resolves a lawsuit the government filed
against Travelers in U.S. District Court in Hartford,
Connecticut, in 1989.
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