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Medicare Contractor to Pay U.S. $6 Million
For Overcharging Federal Government

WASHINGTON, D.C. - AdminaStar Federal, Inc. will pay the United States $6 million to resolve allegations that the company interfered with Medicare evaluations and overcharged the federal healthcare program, Assistant Attorney General Peter D. Keisler, head of the Department of Justice's Civil Division, and David L. Huber, the United States Attorney for the Western District of Kentucky, announced today. AdminaStar Federal, a subsidiary of Anthem Insurance Companies, Inc. headquartered in Indianapolis, provides contractual services for administration of certain aspects of the Medicare program.

The government alleges that company employees, during the period from 1991 through 1998, tampered with and altered Medicare files and claims information, and hung up on customer service phone calls, in an effort to improve scores on Medicare evaluations of Medicare operations in Kentucky administered by AdminaStar Federal. AdminaStar Federal had disclosed certain of the suspected wrongdoing to the Department of Justice and Department of Health and Human Services Office of Inspector General.

"The prosecution of this and similar actions reflects the Department's continuing commitment to ensuring that Medicare contractors meet their responsibilities to the federal healthcare program," said Assistant Attorney General Peter D. Keisler.

The settlement resolves two qui tam, or whistleblower, suits brought against AdminaStar under the False Claims Act. Under the act, private persons, known as relators, may bring suit on behalf of the United States alleging fraud against the government and, in an appropriate case, receive a share of the proceeds.

"This settlement reinforces the strong commitment that the Centers for Medicare & Medicaid Services (CMS) and the federal government have to ensuring that Medicare contractors properly perform their contractual obligations on behalf of Medicare beneficiaries," said Mark McClellan, M.D. PhD., CMS Administrator.

The Department of Health and Human Services Office of the Inspector General investigated the matter. The cases are entitled United States ex rel. Calabrese v. AdminaStar Federal, et al., (W.D. Ky.) and United States ex rel. Moore and Scott v. AdminaStar Federal, et al., (W.D. Ky.).