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RightCHOICE Managed Care to Pay United States $975,000
to Resolve False Claims Act Allegations

WASHINGTON — RightCHOICE Managed Care, Inc., has agreed to pay the United States $975,000 to settle allegations that it violated the False Claims Act in connection with providing health care benefits to federal employees and their dependents in the state of Missouri, the Justice Department announced today. The settlement resolves allegations that RightCHOICE overcharged the Federal Employees Health Benefits (FEHB) Program, which is administered by the U.S. Office of Personnel Management.

The government alleged that RightCHOICE, which participates in the FEHB Program as part of the Blue Cross and Blue Shield Service Benefit Plan (SBP), passed on excessive costs to the FEHB Program in connection with compensating a preferred provider network of physicians known as “Alliance.” The government contended that RightCHOICE paid higher fees to Alliance physicians for serving patients insured through the SBP than these same physicians were reimbursed for providing the same types of services to patients insured through various other health plans. The government also alleged the physicians passed on these higher rates to the Office of Personnel Management as purportedly “reasonable” costs to the FEHB.

“Today’s settlement demonstrates the United States’ determination to make sure health care providers do not overcharge the Federal Employee Health Benefits Program,” said Peter Keisler, Assistant Attorney General of the Justice Department’s Civil Division.

The civil settlement resolves claims brought under the qui tam provisions of the False Claims Act by Ronald Ekstrand against Wellpoint Health Networks, Inc., the entity into which RightCHOICE merged in January 2002. Mr. Ekstrand will receive $165,750 of the total recovery as his statutory award for his suit filed in the U.S. District Court for the Eastern District of Missouri. Under the qui tam provisions of the False Claims Act, private individuals can bring whistleblower actions for fraud on behalf of the United States and collect a share of any proceeds recovered by the suit as well as attorney fees.

"This civil health care fraud settlement should send a signal to all health care providers who receive federal funds that we are committed to protecting the health care system from fraud or abuse," said Catherine L. Hanaway, U.S. Attorney for the Eastern District of Missouri..

The case was handled by the Civil Division of the Department of Justice and the U.S. Attorney’s Office for the Eastern District of Missouri. The case was investigated by the St. Louis offices of the Federal Bureau of Investigation and the Office of Personnel Management-Office of the Inspector General.