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Federal Contractor Misconduct Database (FCMD)

The federal government routinely awards contracts to companies with histories of misconduct, including contract fraud and other violations. POGO believes that providing this website will help to improve contracting decisions and increase public knowledge of how the government spends billions of taxpayer dollars each year. Read more…

Medicare Program False Claims

Highmark, Inc., the parent company of Pennsylvania Blue Shield (PBS), agreed to pay the United States $38.5 million to resolve claims relating to PBS’s performance as a Medicare Part B carrier. PBS had contracted with the Department of Health and Human Services (HHS) to process Medicare Part B claims for Pennsylvania, Delaware, New Jersey, and the District of Columbia. The United States alleged that PBS violated the False Claims Act and other laws between 1989 and 1996 by: (1) failing to properly process Medicare Secondary Payor (MSP) claims, or failing to take appropriate action to recover mistaken MSP payments; (2) obstructing the Contractor Performance Evaluation Program (CPEP) by, among other actions, rigging samples for Health Care Financing Administration (HCFA) audits; (3) failing to recover overpayments resulting from Series 700 errors and misrepresenting to HCFA the impact of those errors; (4) failing to implement Medicare Carrier Manual requirements for the screening of End Stage Renal Disease lab claims; and (5) inappropriately using force codes, following the adjustment of claims, to bypass electronic audits or edits. In a related case, Judith Krafsig-Kearney, a former corporate vice president at PBS, pleaded guilty to conspiring to submit false information to the HCFA and making false statements to HCFA in connection with CPEP audits (see Highmark instance “U.S. v. Krafsig-Kearney (False Statements)”).

Misconduct Type
Government Contract Fraud
Enforcement Agency
Health and Human Services
Contracting Party
Health and Human Services
Court Type
Civil
Disposition
Settlement
Date of Settlement
8/17/1998
Contractors Involved Penalty
Total
Highmark Inc. $38,500,000

See also:

Federal Contractor Misconduct Database