Arizona-based TRICARE contractor settles False Claims Act allegations for $10 million

On September 9, the Department of Justice announced that Arizona-based TriWest Healthcare has paid $10 million to settle claims originally brought in a whistleblower suit that the company defrauded the Department of Defense's TRICARE health insurance program. According to DOJ's press release: TriWest Healthcare Alliance Corporation, a contractor to TRICARE Management Activity, has agreed to pay $10 million to resolve civil false claims allegations, the Justice Department announced today. TRICARE is the U.S. medical benefit plan which covers uniformed personnel, retirees, their dependents and reserve components. The settlement resolves a lawsuit filed by four former TriWest employees, Judi Jerdee, Deborah Thornton, Linda Glassgow and Paige Fiorillo, under the qui tam, or whistleblower provisions, of the False Claims Act. The United States partially intervened in the case on Aug. 29, 2011. The United States and the qui tam plaintiffs allege that between 2004 and 2010, TriWest failed to give TRICARE the benefit of negotiated discounts with service providers under letters of agreement (LOAs). Notwithstanding contractually binding LOAs with health care providers, TriWest submitted claims to TRICARE at higher rates billed by the providers, failing to pass on to TRICARE the savings negotiated through the LOAs. Together, the qui tam relators will receive $1.7 million as their share of the government's recovery. The four relators' share of the recovery is 17%.

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