Union, Firms, Settle False Claims Suit for $2.2 Million

U.S. Atty. Thomas M. DiBiagio in Baltimore announced Jan. 17 that the Am. Postal Workers Union, Nat’l Health Servs., Inc., and United Payors & United Providers, Inc. will pay the government nearly $2.2 million to settle charges that they submitted false claims to the government, specifically the Office of Personnel Mgmt.

APWU, through APWU Health Plan, operates a health plan under the Fed. Employees Health Benefits Program. APWU is located in Washington, D.C. and its Health Plan is in Rockville, Md. NHS is provides health care cost containment services such as case management, pre-certification and utilization review and is located in Louisville, Ky. UP&UP is located in Rockville and provides access to its preferred provider network to reduce health care costs. Both companies were acquired in Mar. 2000 by BCE Emergis Corp. of Canada

The government’s audit focused on health care cost containment contracts between the APWU Health Plan, NHS and UP&UP. From 1994-97, APWU contracted with NHS for case management and pre-certification services and paid for the contracts from its cost containment budget. During the same time, APWU contracted with UP&UP to obtain discounts associated with access to UP&UP’s network and paid for the contracts using benefit expenses.

The defendants allegedly conspired to inflate these contracts with kickbacks that NHS and UP&UP paid to APWU. APWU then used the kickbacks to supplement its administrative expenses, in violation of its contacts with OPM and the budget ceilings imposed by Fed. Acquisition Regulations. APWU, NHS, and UP&UP have denied the allegations.

The suit was originally filed on behalf of the government by Andrea Kessler, a Va. resident, under a provision of the False Claims Act that allows private parties to sue entities that have submitted false claims to the government. FCA permits the recovery of treble the amount of actual loss to the government, plus civil penalties of $5,000 to $10,000 for each false claim. [USAO D.Md. 1/17/02]