Triwest to pay $10 million for withholding discounts
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.