Byline: Price Colman Rocky Mountain News Staff Writer
Federal investigators are focusing more time and effort on their medical-insurance probe of New Mexico Blue Cross and Blue Shield and its Denver-based management firm, Rocky Mountain Health Care Corp., an investigator told the News this week.
That investigation, and a parallel one by the FBI, focuses on problems with the New Mexico Blues' alleged mishandling of a $17 million annual Medicare contract with the government.
The Blues voluntarily withdrew from the contract last year and cut more than 200 related jobs after a $1 million overpayment to Swedish Medical Center in Denver came to light. That money has since been returned to the government, and the people responsible have been disciplined, Blues officials said.
Bill Lucas, inspector general for investigations in the U.S. Department of Health and Human Services' Dallas regional office, characterized the investigation as high-priority.
He also said that since last year's enactment of the Clinton administration's Operation Restore Trust - designed to track down and prosecute health care fraud and abuse - investigators are focusing more time and effort on the Blues case.
``There are some things of major interest to the inspector general that we feel have to be satisfied,'' Lucas said.
The Blues investigation ``is probably a little more intense'' as a result of Operation Restore Trust, he added. ``The government has got to look at itself and its contractors. Before we start going after private providers, we have to make sure our own house is in order.''
The government estimates that fraud accounts for as much as 10% - or $80 billion - of the $800 billion health care sector.
Blues spokesman Carl Miller said he has heard of no additional developments regarding the Medicare probe.
``We have cooperated fully with the Office of Inspector General and will continue to do so,'' he said. ``We really welcome this because the investigation has dragged on for a long time and we would like to see it come to a resolution.''
Lucas declined comment when asked whether the investigation, which began last year, is nearing completion. ``There are some issues we feel we have a good hold on,'' he said. ``There are others we do not at this point. I don't see it being over immediately.''
New Mexico insurance regulators are conducting a separate financial investigation of Blues operations there, in part to determine whether private policy-holders will end up shouldering some of the burden for the loss of the Medicare contract.
That scrutiny prompted New Mexico Insurance Superintendent Chris Krahling to write New Mexico Blues board members a letter last month threatening criminal and civil action if the New Mexico plans fail to comply with state regulations.
Krahling and Blues officials said they are confident the insurer will have corrective action in place by a March 7 deadline.
At the same time, Colorado Insurance Commissioner Jack Ehnes has said that his office is taking a close look at the problems in New Mexico and that they could have an impact on the Colorado Blues' efforts to convert from a non-profit company to a publicly traded, for-profit insurer.
