United States of America, ex rel. Vipul Vaid v. Blue Cross of California; Wellpoint Health Networks, Inc.
Falsifying Budget & Evaluation Reports
$9.25 million Settlement

This case settled in July 2002, when Blue Cross of California (BCC) and its parent company, Well Point Health Networks, agreed to pay the United States $9,250,000 to resolve allegations that BCC defrauded Medicare. The allegations were brought by Vipul Vaid, a former company auditor.

The lawsuit alleges that BCC falsified audit activity dates into an audit tracking database in an effort to deceive the government into believing that the company had performed more audit work than it actually performed during the pertinent fiscal year. BCC was responsible for auditing cost reports submitted by hospitals and other Medicare providers to ensure that the providers were properly reporting their allowable costs and seeking accurate and appropriate reimbursements. The government evaluated BCC's performance and renewed its contract, as a fiscal intermediary each year, based on the required audit work. The settlement resolves claims submitted between 1990 and 2000 for the covered conduct.