EDS to Settle Texas Medicaid Billing Claims

Electronic Data Systems Corp. agreed to pay Texas $3.91 million after the state accused the company of overcharging millions of dollars to process Medicaid claims.

Electronic Data will refund the state $3.43 million related to overhead expenses as well as pay a $250,000 penalty and $232,000 to cover Texas’ investigation costs, a company spokesman said. Electronic Data didn’t admit wrongdoing.

National Heritage Insurance, the Electronic Data unit that handles Medicaid claims processing, collected $99 million in fees on $3.5 billion in claims last year under a state contract ending in 2002, the Dallas Morning News reported, citing state records.

Charges won’t be filed against Electronic Data or National Heritage, the Travis County district attorney’s office said.

Shares of Plano, Texas-based Electronic Data fell 21 cents to close at $60.81 on the NYSE.