October 26, 2006 -
KEYSTONE
MERCY HEALTH PLAN TO PAY GOVERNMENT $5 MILLION
TO RESOLVE CIVIL LIABILITIES UNDER THE FALSE CLAIMS ACT
PHILADELPHIA – Acting United States Attorney Laurie Magid today announced
that Keystone Mercy Health Plan has agreed to pay $5 million to resolve civil
liabilities under the federal False Claims Act and other federal and state
statutes and common law principles.
Keystone Mercy Health Plan is a Pennsylvania partnership that operates a managed
care plan for thousands of Medical Assistance recipients pursuant to a contract
with the Pennsylvania Department of Public Welfare (DPW). As part of its contract
with DPW, Keystone Mercy Health Plan was responsible for paying healthcare
providers for services rendered to qualified Medicaid recipients. Keystone
Mercy Health Plan was also responsible for preventing and recovering overpayments
to providers in instances where other programs and carriers were responsible
for part of the cost of such services. The contract also required Keystone
Mercy Health Plan, under certain circumstances, to return overpayments to DPW.
From 1997 though 1998, Keystone Mercy Health Plan failed to return such overpayments
to DPW. (See Complaint)
Keystone Mercy Health Plan has denied any wrongdoing in agreeing to the settlement.
“Medicaid is a state and federally funded program with limited funds,” said
Magid. “Managed care plans must understand that failing to return these
types of overpayments has an impact on every taxpayer and Medicaid recipient
in this country and we will not allow such practices to go uncorrected.”
The United States’ investigation and civil settlement encompasses allegations brought by a former employee of Keystone Mercy Health Plan. Lorraine A. Pittelli, formerly a claims recovery examiner for Keystone, filed an action on behalf of the United States under the qui tam provisions of the False Claims Act. Under the terms of an agreement, Pittelli is to receive $780,000 from the proceeds of the settlement for her role in filing the qui tam complaint.
This investigation was conducted by the United States Attorney’s Office, Eastern District of Pennsylvania. Assistant United States Attorney Joseph Trautwein and Kathleen Grogan, Senior Assistant General Counsel, Pennsylvania Department of Public Welfare, handled the civil investigation.
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UNITED
STATES ATTORNEY'S OFFICE EASTERN DISTRICT, PENNSYLVANIA Suite 1250, 615 Chestnut Street Philadelphia, PA 19106 |
Contact: RICH MANIERI Media Contact 215.861.8525 |
Benjamin Franklin Photo by B. Krist for the Greater Philadelphia Tourism Marketing Corporation