| Managed Care On-Line News: Articles |
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NEWS RELEASE
Contact: David Mlawsky
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FOR IMMEDIATE RELEASE
FEDERAL GOVERNMENT TO PAY HMO $25.7 MILLION
IN LARGEST REPORTED SETTLEMENT OF CLAIM TO RECOUP UNDERPAYMENTS
Payment is latest in a string of recent deals in which the government is nailed for its sloppy bookkeeping.
WASHINGTON, Dec. 11, 1996 - Managed Care Week, a Washington, D.C.-based industry newsletter, has learned that the U.S. Office of Personnel Management (OPM) agreed to pay Kaiser Foundation Health Plans of Northern California $25.7 million plus interest to settle a claim that the government underpaid Kaiser from 1987 to 1996 for premiums to cover workers in the Federal Employees Health Benefits Program (FEHBP).
"The settlement appears to be the largest in a string of recent similar deals the government has struck with several other HMOs that contract to cover federal employees," according to David Mlawsky, editor of Managed Care Week, who broke the story. For many years, managed care plans in FEIQBP have complained that the government does not keep accurate records of the number of covered federal workers and retirees in participating health plans. As a result, HMOs say they are getting gypped out of FEHBP premium dollars.
At least three similar settlements have been reached: last September, OPM agreed to pay NYLCare Health Plan, a Washington, D.C.-based HMO, $8.25 million to settle claims that FEHBP underpaid premiums for government workers. In 1995, the government agreed to pay $3.3 million in premium underpayments to an HMO :run by Rockville, Md.-based Mid Atlantic Medical Services Inc.
In 1994, the government settled with Kaiser Foundation Health Plans of the Mid-Atlantic States for about $6.8 million in premium underpayments.
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