EXECUTIVE SUMMARY:

In April 1988 the Department of Justice (DOJ) filed a lawsuit against Provident seeking to recover overpayments due the Federal Government as a result of Provident's failure to comply with Medicare secondary payer (MSP) requirements. The Office of Inspector General provided various audit services as members of a task force to determine the amount of Provident's MSP liability. In May 1993 DOJ settled its lawsuit against Provident for $27 million. The agreement also contained provisions which, if implemented, should help preclude extensive MSP overpayments in the future. The OIG will monitor efforts in implementing the settlement agreement provisions. We are recommending that the Health Care Financing Administration continue its ongoing efforts to resolve similar MSP situations.