FOR IMMEDIATE RELEASE                                         CIV
WEDNESDAY, OCTOBER 25, 1995                        (202) 616-2765
                                               TDD (202) 514-1888

     BLUE CROSS/BLUE SHIELD COMPANIES SETTLE MEDICARE CLAIMS,
    PAY UNITED STATES $117 MILLION, AGREE TO SHARE INFORMATION

     WASHINGTON, D.C. -- Sixty-seven Blue Cross/Blue Shield
companies across the nation have paid the United States a total
of $117 million to settle government claims that Medicare made
primary payments for health care services that should have been
paid by the Blue Cross/Blue Shield private insurance companies,
the Department of Justice announced today.  
     As part of the settlement, the companies also agreed to
provide information in the future that will allow the federal
government to identify, before Medicare makes payments, those
situations in which the companies are liable for the payments,
said Assistant Attorney General Frank W. Hunger, head of the
Civil Division.
     Under the terms of the settlement agreement, the companies
paid $27 million in cash and relinquished any claim to a refund
of approximately $90 million they have paid pursuant to "data
match" recovery efforts.  "Data match" legislation permits the
Health Care Financing Administration, the Department of Health
and Human Services agency that administers Medicare, to match
Internal Revenue Service and Social Security data to determine
when private insurers are responsible for paying claims.  The
companies did not admit liability.
     Hunger said today's settlement was part of a broader
enforcement effort by HCFA to enforce the so-called Medicare
Secondary Payer laws.    
     MSP laws require private insurers, such as the Blue
Cross/Blue Shield companies, 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 care
coverage through his or her employer.   
     Provident Insurance Company, Blue Cross/Blue Shield of
Michigan and the Travelers Insurance Companies also paid millions
of dollars to settle individual suits making similar claims.  
     "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."   
     In acting on behalf of HCFA, the Department sought to
recover mistaken primary payments in situations where both the
private insurance companies and Medicare provided health care
coverage.  
     "We are satisfied that the government has received fair and
equitable compensation from the Blue Cross companies under this
agreement," Hunger said, emphasizing the importance of the
provision requiring each of the 67 companies to share data with
the government.  
     The Department said this provision will permit significant
future savings because it will enable the government to process
Medicare claims more accurately and efficiently.
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95-551