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Coventry to pay $3 million to settle Medicare set-aside investigation

Posted On: Nov. 21, 2012 12:00 AM CST

Coventry to pay $3 million to settle Medicare set-aside investigation

Coventry Health Care Inc. has agreed to pay a $3 million settlement as part of a federal investigation into its handling of Medicare set-aside agreements, according to the U.S. Attorney's Office.

Bethesda, Md.-based Coventry and its subsidiary, First Health Priority Services, "inappropriately accessed" records of Medicare beneficiaries from May 2005 to December 2006, the attorney's office said in a statement Wednesday. The information was used to determine the Medicare eligibility of workers compensation claimants, which in turn allowed the companies to sell a Medicare set-aside arrangement product to clients.

Medicare set-asides are funds used in workers comp settlements to pay future medical costs of Medicare-eligible workers.

The attorney's office said Coventry's unauthorized access to the Medicare database was "intended in part to give Coventry an unfair advantage over its competitors." Several Coventry executives reportedly were aware of the plan, including the company's senior vice president for worker comp services, senior vice president for government programs, senior vice president of service operations and the manager of Coventry's Medicare enrollment department.

Coventry's settlement will prevent the company from facing criminal prosecution in the case, the attorney's office said in its statement.

In a statement Tuesday, Coventry said the company fully cooperated with the U.S. Attorney's investigation, which began in 2008. The company no longer sells the Medicare set-aside arrangement product that prompted the investigation.

In addition to the settlement, Coventry has agreed to provide ongoing privacy, security and fraud-prevention training for employees that have access to government databases, the attorney's office said.