05-10-2005 City Suspending Use of Healthcare Administrator and Filing Suit to Recover Payment

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CITY SUSPENDING USE OF HEALTHCARE ADMINISTRATOR AND FILING SUL.. Page 1 of 1 � v%• 'Building a 21St Century City " ' rs Stephen J. Luecke, Mayor RELEASE FROM: FOR RELEASE: Office of the Mayor Tuesday, May 10, 2005 CITY SUSPENDING USE OF HEALTHCARE ADMINISTRATOR AND FILING SUIT TO RECOVER PAYMENT The City of South Bend filed suit today to recover payments from Healthcare Resources Group, LLC (HRG), the third-party administrator of its health benefits program, seeking recovery of over $971,000.00 in funds paid from March 29, 2005 to May 4, 2005 to reimburse employees and health care providers under the City's benefits plans. Late last week, the City of South Bend learned of non-payment of claims processed by HRG and was advised of irregularities in healthcare claims processing at a number of other businesses and organizations in the community using the same healthcare administrator. As a result, the City has suspended use of HRG healthcare administrative services and has filed suit to recover funds. HRG has been the City of South Bend's healthcare administrator since 1996. The City's Benefits Division immediately began a review of healthcare claims and as of this morning has found indications that there were non-payments to healthcare providers over the past six weeks totaling $971,000, despite apparent representations that those sums had been paid.All city payments to Healthcare Resources Group have now been stopped. Although there does not appear to be problems with reimbursement payments directly to City employees or retirees, information continues to be gathered. The City has begun the process of interviewing potential new administrators for this service and is preparing to move the account as quickly as possible. Completing the change-over is expected to take approximately two weeks. During this transition time, all medical bills will be received by the City's Benefits Department, who will then process all claims. There will be no loss of healthcare coverage for eligible employees or retirees. Contact: Chuck Leone, City Attorney, 574-235-5857 Catherine Fanello, City Controller, 574-235-5887 Mikki Dobski, Director of Communications 8r Special Projects, 574-235-5855/876-1564 Back I City Home Page I City Directory I Site Map I Search powered by FreeFind Created by the City of South Bend Department of Information Technologies. Copyright©2005 City of South Bend.All rights reserved. http://www.ci.south-bend.in.us/Press/Releases 2005/051005 HRG.htm 1/13/2006