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Medicaid managed-care insurer settles whistleblower suit

Keystone Mercy Health Plan, a Philadelphia-based Medicaid managed-care insurer, has agreed to pay $5 million to settle a benefits-claims dispute.

The suit, which began as whistle-blower action under the False Claims Act, alleged that Keystone Mercy failed to return overpayments for some Medicaid services to the Pennsylvania Department of Public Welfare during 1997 and 1998.

Keystone Mercy manages Medicaid services for more than 273,000 residents in Philadelphia and surrounding Pennsylvania counties.

The settlement agreement, dated October 25, 2006, is available at the U.S. Attorney for the Eastern District of Pennsylvania website. A Philadelphia Inquirer story ran on October 27, 2006.

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