Curious Cases of Eric Johnson Trouble Pa. Blues Insurer

In a development that has some actuaries scratching their heads, the U.S. Attorney’s Office for the Eastern District of Pennsylvania on Sept. 3 unveiled a settlement with two Medicare Advantage plan subsidiaries of Independence Blue Cross (IBC) involving “inflated” MA plan bids. But the case did not have to do with allegations of exaggerated risk scores, which have been central to many recent MA false claims cases and attracted the attention of the Dept. of Justice (DOJ), and instead centers on standard bid miscalculations that might have been ignored — had it perhaps not been for the insurer’s complicated history with the whistleblower.

The two subsidiaries of the Philadelphia-based insurer — Keystone Health Plan East, Inc. (KHPE) and QCC Insurance Company, Inc. — will pay $2.25 million plus interest to resolve False Claims Act allegations of “incorrectly calculating anticipated plan costs, resulting in inflated Medicare Advantage plan bids” to CMS, according to the press release from the U.S. Attorney’s Office. The settlement resolves a lawsuit initially filed by IBC employee Eric Johnson, in which the federal government intervened. The case, United States ex rel. Eric Johnson v. Independence Blue Cross (No. 10-CV-1520), at press time remained under seal. Johnson’s share of the recovery is approximately $500,000.

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