BlueCross Blueshield of Tennessee Agrees to $2.1 Million Settlement For Violating False Claims Act

On August 11, 2008, the Department of Justice announced a $2.1 million settlement to be paid by BlueCross BlueShield of Tennessee (BCBS-T) to the United States. BCBS-T, which operates as Riverbend Government Benefit Administrators, agreed to the settlement in response to allegations of its violating the False Claims Act. 

The allegations against BCBS-T came in response to the company’s failure to modify the cost-to-charge ratios of hospitals in the state of New Jersey, for which it is the primary Medicare Part A Fiscal Intermediary (Part A Fiscal Intermediary’s are private insurance companies that manage Medicare claims). Because the cost-to-charge ratios were not conducted in a timely manner, many medical facilities were given excessive “outlier payments,” or supplementary reimbursements for unusually high-costing care, by Medicare.

“Today’s 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,” said Gregory G. Katsas, Assistant Attorney General of the Civil Division.

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