January 18, 1995 Blue Cross Blue Shield of Michigan
Blue Cross Blue Shield of Michigan has agreed to pay $27.6 Million Dollars to settle claims asserted in a qui tam suit filed by Darcy Flynn, a former Blue Cross Auditor.
Under a contract with the government, Blue Cross Blue Shield managed the Medicare Part A program and was required to audit the cost reports of participating hospitals, determine which costs were authorized under the Medicare regulations and make the appropriate payments.
The allegations of the qui tam case were that Blue Cross Blue Shield defrauded the government by performing cursory and inadequate audits. When the government asked to review specific audits, Blue Cross Blue Shield “corrected” the audits and backdated revised work papers to conceal the fact that the original audits were inadequate and poorly done.
As part of the settlement, Ms. Flynn will receive over $5.5 Million Dollars for having filed the qui tam case.
See U.S. Dept of Justice Press Release 1/18/95