June 25, 2002  General American Life Insurance Company Inc.

General American Life Insurance Company Inc. has agreed to pay $76 Million Dollars to settle claims asserted in a qui tam lawsuit filed by two former employees, Harry and Nancy Riggs.

General American has contracted to process Medicare claims for the government. Under its contract with the government, the company was responsible for making individual determinations regarding coverage on claims received from Medicare beneficiaries, and the processing approved claims for payment from the Medicare trust fund.

The allegations of the qui tam case were that General American failed to process claims properly, submitted false claims to the government regarding both the accuracy and the timeliness with which it handled those claims, failed to report errors which it had identified in the process, and concealed its true error rate by deleting claims selected for review by the government.

As part of the settlement, Harry and Nancy Riggs will receive $14.4 Million Dollars for having filed the qui tam case.

See U.S. Dept of Justice Press Release 6/25/02

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