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About POGO's Federal Contractor Misconduct Database (FCMD)
The government awards contracts to companies with histories of misconduct such as contract fraud and environmental, ethics, and labor violations. In the absence of a centralized federal database listing instances of misconduct, the Project On Government Oversight (POGO) is providing such data. We believe that it will lead to improved contracting decisions and public access to information about how the government spends hundreds of billions of taxpayer money each year on goods and services. Report an instance of misconduct »
Ranking: 93
Highmark Inc.
Pittsburgh, Pa.-based Highmark is one of the largest health insurers in the United States. Highmark serves about 34.4 million people across the country through health, dental, vision, and customized supplemental health products and services. Highmark also helps federal and state agencies administer their public health programs, including Medicare. Highmark was created in 1996 by the consolidation of two Pennsylvania licensees of the Blue Cross and Blue Shield Association — Pennsylvania Blue Shield (now Highmark Blue Shield) and Blue Cross of Western Pennsylvania (now Highmark Blue Cross Blue Shield).
Federal Contract $: $ 692.5m
Total Number of Instances: 7
Total Misconduct dollar amount: $ 59.3m
- Annual Report
- Ethics Page
- Hoovers Profile
- Lobbying Information
- Political Activity
- Press Page
- Website
- Contracting Information
Instances of Misconduct
1. Medicare Program False Claims
Highmark, Inc., the parent company of Pennsylvania Blue Shield (PBS), agreed to pay the United States $38.5 million to resolve claims relating to PBS’s performance as a Medicare Part B carrier. PBS had contracted with the Department of Health and Human Services (HHS) to process Medicare Part B claims for Pennsylvania, Delaware, New Jersey, and the District of Columbia. The United States alleged that PBS violated the False Claims Act and other laws between 1989 and 1996 by: (1) failing to properly process Medicare Secondary Payor (MSP) claims, or failing to take appropriate action to recover mistaken MSP payments; (2) obstructing the Contractor Performance Evaluation Program (CPEP) by, among other actions, rigging samples for Health Care Financing Administration (HCFA) audits; (3) failing to recover overpayments resulting from Series 700 errors and misrepresenting to HCFA the impact of those errors; (4) failing to implement Medicare Carrier Manual requirements for the screening of End Stage Renal Disease lab claims; and (5) inappropriately using force codes, following the adjustment of claims, to bypass electronic audits or edits. In a related case, Judith Krafsig-Kearney, a former corporate vice president at PBS, pleaded guilty to conspiring to submit false information to the HCFA and making false statements to HCFA in connection with CPEP audits (see Highmark instance “U.S. v. Krafsig-Kearney (False Statements)”).... more»
2. Veritus Medicare Services False Claims
Highmark paid the United States $1.5 million to settle potential civil claims under the False Claims Act. The government accused Highmark’s Veritus Medicare Services division of filing millions of dollars in false Medicare claims between 1992 and 1994 by tampering with and altering Medicare files and claims information in an effort to improve scores on Medicare evaluations of the division’s performance.... more»
3. Love, et al. v. Blue Cross and Blue Shield Assoc., et al. (RICO)
A lawsuit accused several Blue Cross and Blue Shield plans, including Highmark, Inc. and Highmark West Virginia, Inc., of engaging in a conspiracy to improperly deny, delay, and/or reduce payments to physicians, physician groups, and physician organizations, in violation of the Racketeer Influenced and Corrupt Organizations (RICO) Act. Highmark settled the lawsuit for almost $10 million.... more»
4. Royal Mile Company, et al. v. UPMC, et al. (Conspiracy to Monopolize Health Ins. Market)
A class action lawsuit filed on behalf of individuals and companies that purchased health insurance from Highmark alleges that Highmark and the University of Pittsburgh Medical Center (UPMC) conspired to monopolize the Pittsburgh-area health insurance market from 2002 until 2008, causing customers to pay excessive, above-market premiums. In August 2012, the plaintiffs settled with Highmark for $4.8 million.... more»
5. Turpin v. Highmark (EOB Form Noncompliance With ERISA)
A class action lawsuit alleged that computerized “Explanation of Benefits” (EOB) forms sent by Highmark to customers failed to provide adequate information as to why claims were rejected and how to appeal claim denials, in violation of the Employee Retirement Income Security Act (ERISA). Under the terms of a settlement, Highmark agreed to make significant changes in its EOB forms. The settlement also provided that class members who had certain claims denied between July 2003 and June 2006 would be able to request a review of those denials and, if successful, have the benefits paid by Highmark.... more»
6. U.S. v. Krafsig-Kearney (False Statements)
Judith Krafsig-Kearney, a former corporate vice president at Highmark predecessor Pennsylvania Blue Shield (PBS), pleaded guilty to conspiring to submit false information and making false statements to the government in connection with the Medicare program. Krafsig-Kearney was responsible for ensuring that PBS complied with all Medicare requirements and was required to provide the government with full, complete and truthful information regarding the company's compliance. Prosecutors alleged that she and others in the company devised a strategy in 1992 for meeting federal audit standards by only providing auditors with the most favorable case samples. See related Highmark instance, “Medicare Program False Claims”).... more»
7. U.S. ex rel. Drescher v. Highmark (Medicare Program False Claims)
The United States intervened in a False Claims Act lawsuit alleging that Highmark filed false Medicare claims. Highmark was accused of knowingly underpaying the amounts due for care of certain Medicare beneficiaries under employer group health plans insured or administered by the company. The suit was originally filed by Highmark employee Elizabeth Drescher, who claimed she was demoted for notifying the company about problems with the company’s Medicare program compliance. Highmark settled the lawsuit for $4.5 million.... more»
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