The settlement resolves allegations that, while acting as the primary Medicare Part A Fiscal Intermediary for the state of New Jersey, BCBS-T failed to adjust the cost-to-charge ratios for many New Jersey hospitals in a timely manner between 2000 and 2002, resulting in the payment of excessive “outlier payments” by the Medicare program to those medical facilities. A Part A Fiscal Intermediary is a private insurance company that processes and pays Medicare claims.
In addition to its standard payment system, Medicare provides supplemental reimbursement, called outlier payments, to hospitals in cases where the cost of care is unusually high. Congress enacted the supplemental outlier payment system to ensure that hospitals possess the incentive to treat inpatients whose care requires unusually high costs.
“Todays settlement demonstrates that the Justice Department will be vigilant in protecting the Medicare program from all who abuse it, including contractors that falsely bill for crucial tasks that they do not perform,” says Gregory G. Katsas, Assistant Attorney General of the Civil Division in a statement.
The investigation and settlement to resolve the allegations with BCBS-T was the result of a coordinated effort among the Justice Department’s Civil Divisions Commercial Litigation Branch; the U.S. Attorney’s Office for the District of New Jersey, Affirmative Civil Enforcement Unit; the Department of Health and Human Services, Office of Inspector General and Office of Counsel to the Inspector General; CMS; and the FBI.
