PacifiCare Unit to Pay $9 Million in Settlement

The Oklahoma unit of Santa Ana-based PacifiCare Health Systems has agreed to pay $9 million to settle civil charges that it overcharged the Federal Employees Health Benefit Plan, the U.S. attorney’s office said Wednesday.

Wilma Lewis, U.S. attorney for the District of Columbia, said health maintenance organization PacifiCare of Oklahoma Inc. lied when it told the government it was charging the same price as for a commercial business for a health benefits package.

In one instance, PacifiCare included amounts for state taxes on insurance premiums in calculating the rates it provided to the government, a violation of the Omnibus Budget Reconciliation Act of 1990, the government said.

Additionally, PacifiCare gave a discount to Oklahoma City that it did not provide to the federal plan, a similarly sized subscriber group.

Most of PacifiCare’s $9-million payment will be credited to its contingency reserve, which will eventually result in lower premiums for some participants in the federal employees health plan.

The plan, established in 1959 to provide a funded medical insurance program for federal employees and their families, is the federal government’s third-largest health care expenditure.

PacifiCare is a major provider of managed health care services.