Progressive Group Of Insurance Companies Agree To Pay $2M To Resolve False Claims Allegations

Acting U.S. Attorney William E. Fitzpatrick announced Tuesday two insurance companies part of the Progressive Group of Insurance Companies have agree to pay over $2 million to resolve allegations that they violated the False Claims Act.

Judge And JuryProgressive Garden State Insurance Co. of West Trenton, New Jersey and Progressive Casualty Insurance Co. of Cleveland, Ohio violated the False Claims Act, resulting in Medicaid and Medicaid paying for claims for which the companies were responsible.

If a Medicaid or Medicare recipient has private health insurance coverage, the insurance coverage is always referred to as the “primary payer.” The primary payer is responsible for paying to the limits of its coverage for an individual’s health care claims. If the health care costs exceed what the primary payer covers, Medicaid or Medicare, referred to as “secondary payer,” will typically pay the remaining costs.

Under federal law, private health insurance coverage must serve as the primary payer. Both insurance companies offered customers “health first” automobile insurance policies. Under these policies, Progressive designated the policyholder’s health insurance carrier as the primary payer for claims related to automobile accidents. Under the law, Progressive could not decline to make primary payment to Medicaid or Medicare recipients. But, the company allowed Medicaid and Medicare recipients to elect a “health first” policy.

A large number of New Jersey policyholders who were Medicaid and Medicare recipients incurred claims related to automobile accidents. Since Progressive’s “health first” policies designed the company as the secondary payer, Medicaid and Medicaid paid for claims that Progressive should have paid.

New Jersey and the United States government alleged that Progressive Medicaid regulations and the Medicare Secondary Payer Act, resulting in false claims being submitted to Medicaid and Medicare.

The claims were raised in a lawsuit filed under the whistleblower provisions of the False Claim Act. The whistleblower will receive approximately $600,000 of the settlement recovered by New Jersey and the United States.

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