May 2, 1997  Blue Shield of California

Blue Shield of California has agreed to pay $12 Million Dollars to settle claims asserted in a qui tam suit filed by Weldon Dodson, a former employee of Blue Shield’s medical division in Chico California. The allegations of the case were that Blue Shield submitted false claims for payment under its contract with the Health Care Financing Administration (HCFA) to process and pay Medicare claims. The allegations included claims that the company covered up processing errors, from HCFA auditors in order to obtain more favorable scores under the program for grading its claims processing capabilities. In an effort to obstruct HCFA’s efforts to review the companies performance in processing Medicare claims, company employees altered and discarded documents which would have disclosed claims processing errors.

As part of the settlement, Mr. Dodson will receive over $2.1 Million Dollars for having filed the qui tam case.

See U.S. Dept of Justice Press Release 5/2/97

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