A settlement has been reached to resolve False Claims Act allegations against Progressive Casualty Insurance Company and Progressive Garden State Insurance Company.
The allegations arose from a lawsuit that claimed Progressive Casualty Insurance Company, and Progressive Garden State Insurance Company, both part of the Progressive Group of Insurance Companies, violated the False Claims Act by causing Medicare and Medicaid to pay for claims for which the companies were responsible for.
If an individual has Medicare or Medicaid and other private health insurance coverage, each type of coverage constitutes a “payer.” The insurance coverage that pays first, referred to as the “primary payer,” typically pays to the limits of its coverage for an individual’s health care claims. Generally, if there are health care costs that the primary payer does not cover, these costs may then be paid by the individual’s other insurance coverage, referred to as the “secondary payer.”
Under federal and New Jersey state law, if an individual has both private insurance and Medicare or Medicaid, neither Medicare nor Medicaid may serve as the primary payer for certain claims and the private insurer must remain as the primary payer.
According to the government, allegedly under “health first” automobile insurance policies that it offered, Progressive designated the policyholder’s health insurance carrier as the primary payer for medical claims that arose in connection with an automobile accident. Even though, under the law, Progressive could not decline to make primary payment to Medicare or Medicaid beneficiaries, the company permitted Medicare and Medicaid beneficiaries to elect a “health first” policy. Many of these policyholders in New Jersey who were Medicare or Medicaid beneficiaries incurred medical claims in connection with an automobile accident. Because Progressive’s “health first” policies designated the company as the secondary payer, Medicare and Medicaid improperly paid for claims that Progressive should have paid. The United States and New Jersey alleged that this conduct violated the Medicare Secondary Payer Act and Medicaid regulations and, as a result, Progressive caused false claims to be submitted to Medicare and Medicaid.
The whistleblowers' share of the settlement will be more than $600,000 of the more than $2 million that the United States and New Jersey recovered.
