Triwest to pay $10 mil­lion for with­hold­ing dis­counts

Modern Healthcare - - Late News -

TriWest Health­care Al­liance, a pri­vate man­aged-care firm that ad­min­is­ters health­care ben­e­fits for mil­i­tary fam­i­lies in 21 Western states, has agreed to pay $10 mil­lion to set­tle whis­tle-blower al­le­ga­tions that it with­held price dis­counts from the De­fense Depart­ment. Four former TriWest em­ploy­ees sued the com­pany, al­leg­ing in a False Claims Act law­suit that be­tween 2004 and 2010, the com­pany ne­go­ti­ated for­mal let­ters of agree­ment that pro­vided the firm with dis­counts from health­care providers. Yet TriWest failed to pass on the ben­e­fit of those dis­counts to the Tri­care Man­age­ment Ac­tiv­ity, which is the mil­i­tary health plan for ac­tive-duty and re­tired ser­vice mem­bers ad­min­is­tered by the De­fense Depart­ment. TriWest was in the midst of a $2.1 bil­lion con­tract with the De­fense Depart­ment to ad­min­is­ter Tri­care ben­e­fits dur­ing the time of the al­leged ac­tiv­ity. A writ­ten state­ment from TriWest Pres­i­dent and CEO David McIn­tyre Jr., said the com­pany made a mis­take and has im­ple­mented an­nual third-party au­dits among other vol­un­tary steps to ad­dress the prob­lems. The com­pany reg­u­larly ne­go­ti­ated lower rates for cer­tain spe­cialty ser­vices with providers, but then failed to ap­ply the dis­counts be­cause of “TriWest’s highly au­to­mated sys­tem” for claims pro­cess­ing, McIn­tyre said. The whis­tle-blow­ers are set to re­ceive $1.7 mil­lion of the $10 mil­lion set­tle­ment.

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