FOR IMMEDIATE RELEASE FRIDAY, SEPTEMBER 29, 1995

CIV (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. ##### 95-519