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Date: October 25, 1995 
Contact:  HCFA Press Office (202) 690-6145

This effort will ensure that timely claims data are exchanged between HCFA and the Blue Cross and Blue Shield Association, and could result in savings of $100 million per year to Medicare.

According to Mr. Vladeck, "By working together to reach an agreement, HCFA and BCBSA have settled the dispute over MSP claims. The agreement creates the foundation for an improved MSP program, which will serve the Medicare program and its beneficiaries more efficiently and effectively in the future."

A major element of the agreement is the creation of a three- year data exchange program between the Blue Cross and Blue Shield Plans and HCFA. In this program, BCBSA will provide HCFA with data for Medicare claims processing. This will avoid mistaken payments by Medicare where a Blue Cross and Blue Shield Plan has the primary responsibility to pay the claim. It will bring substantial savings to Medicare and help to eliminate the administrative burden of recovering mistaken Medicare payments.

The Medicare secondary payer laws require that employer- provided health insurance for working Medicare beneficiaries be the primary payer of health insurance claims for these beneficiaries, and that Medicare be the secondary payer. Medicare is also the secondary payer for the spouses of working Medicare beneficiaries.

In the past, the lack of sufficient information led to problems identifying these beneficiaries. As a result, Medicare often made the primary payment for these beneficiaries and would then try to seek reimbursement from the employer health plan. However, the lack of data led to thousands of claims being paid by Medicare for which Medicare was never reimbursed by the employer health plans.

In the 1980s, the U.S. Justice Department, on behalf of HCFA, filed suit against three insurers to recover alleged Medicare overpayments. Both BCBSA and the Health Insurance Association of America then filed suits against the federal government, challenging parts of HCFA's interpretation of the MSP laws. Following these actions, HCFA and BCBSA engaged in discussions to resolve the underlying issues, and remained committed throughout the deliberations to reaching a constructive agreement. This settlement has achieved that goal.

Other key aspects of the settlement include:

• The settling Blue Cross and Blue Shield Plans have agreed to help HCFA identify health care providers who have been paid twice for the same claim by both a Blue Cross and Blue Shield Plan and Medicare.

• The parties have agreed to end their dispute over past due amounts under the MSP laws in consideration of approximately $115 million paid by the Blue Cross and Blue Shield Plans previously in response to the HCFA Data Match Project and voluntarily under the settlement. Medicare was also released from reimbursing the Blues Plans for overpayments made by the plans.