Path: bloom-picayune.mit.edu!snorkelwacker.mit.edu!americast.com!americast.com!americast-post Newsgroups: americast.twt.misc From: americast-post@AmeriCast.Com Organization: American Cybercasting Approved: americast-post@AmeriCast.com Subject: Blues unit agrees to settle fraud suit Date: Wed, 18 Nov 92 16:10:35 EST Message-ID: \SE C;MONEY \HD Blues unit agrees to settle fraud suit \BY Karen Riley \CR THE WASHINGTON TIMES A subsidiary of Blue Cross and Blue Shield of the National Capital Area has agreed to pay $425,000 to settle a whistle-blower's lawsuit charging the company with overbilling a federal health plan. The suit charged that the company knowingly overcharged the Agency for International Development for the cost of handling claims against the agency's self-insured health plan in 1988 and 1989. Susan Hollrith of Clifton, who was director of finance and administration for National Capital Administrative Services Inc. (NCAS) of Fairfax, sued the company in November 1991, about a month after she resigned. She invoked the "qui tam," or whistle-blower, clause of the federal False Claims Act, which allows the government to join as a plaintiff in such cases. The Justice Department did so in July. The settlement is pending approval by U.S. District Judge James Cacheris in Alexandria. "We decided we can't comment on the case until it is blessed by the judge," Blue Cross spokeswoman Barbara Exstrum said. Mrs. Hollrith said NCAS, after losing money on a contract to administer the AID's health program, submitted claims for additional payments based on losses that stemmed from other factors. She charged NCAS with overstating the amount of its losses and creating false documents to inflate its losses. NCAS agreed to settle because "we see it as a compromise by all the parties involved," Miss Exstrum said. The company was forced to request an adjustment in the bill because the health plan was more costly to administer than the company had estimated, she said. "The price originally charged by NCAS was less than 50 percent of what was charged by the previous administrator and was also 50 percent less than the new contractor's charges," she said. "NCAS did make some substantial errors in their computations in their claim for additional reimbursement, and we do admit that those errors existed, but we strongly denied that the errors were intentional or knowingly submitted false claims," Miss Exstrum said. The AID terminated the NCAS contract after the lawsuit was filed but always said it was pleased with the company, she said. The Justice Department had no comment on the case yesterday. As part of the settlement, NCAS agreed to pay the Justice Department $385,000 and Mrs. Hollrith $40,000. Mrs. Hollrith will get $68,000 of the government's payment under the False Claims Act, which entitles a whistle-blower to a percentage of the government's recovery in a fraud action. "I didn't go into it for the money, so it's fine with me," Mrs. Hollrith said yesterday. She expressed relief that the yearlong case had been resolved, but she said it was "not a good settlement" because the government got back far less than the nearly $1 million she says NCAS overbilled the AID. This article is copyright 1992 The Washington Times. Redistribution to other sites is not permitted except by arrangement with American Cybercasting Corporation. For more information, send-email to usa@AmeriCast.COM