The Justice Department alleged that in 2012, the six plans learned of calculation errors that had inflated the rates they had been paid in previous years, according to a March 13 news release from the department. The plans allegedly took steps to conceal the existence of the overpayments from the government and continued to submit invoices at the inflated rate.
In the following year, some of the plans allegedly asked them to continue paying them at the inflated rates even though they knew of the calculation errors, according to the release.
The six health plans participating in the program are:
- Brighton Marine Health Center
- Christus Health Services Johns Hopkins Medical Services Corp.
- Martin’s Point Health Care
- Pacific Medical Center
- St. Vincent’s Catholic Medical Centers of New York
The health plans’ trade group, US Family Health Plan Alliance, was also named in the lawsuit. The group said in a statement that it is disappointed that the Justice Department “has decided to join a meritless lawsuit filed against all of the health plans that have long provided needed healthcare services to members of the military and their families.”
“Through this suit, the DOJ challenges the payment rates that each of the plans and the government expressly negotiated in a fixed-rate contract more than 10 years ago,” the statement said. “The lawsuit comes many years after the plans provided their services and paid related expenses, in reliance on those agreed-to rates.”
The group said it denies the department’s assertions “and are vigorously contesting these allegations.”
The Justice Department said it also reached a settlement with Defense Department contractor Kennell & Associates related to the allegations. The consulting firm provided actuarial consulting services to the Defense Health Agency in connection with the program. The firm agreed to pay nearly $780,000 plus interest and contingent payments based on its annual contract revenue and cash reserves through 2025.
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