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Insurance firm changes benefit plan after charges

Insurance firm changes benefit plan after charges

December 26th, 2012 in News

KANSAS CITY, Mo. (AP) - An insurance company that provides coverage to Kansas City and Jackson County employees has changed its wellness incentives after seven people were indicted on charges of abusing the program.

Blue Cross and Blue Shield told Kansas City Council members last week it has designed a new program that's more verifiable than the previous offering, which relied upon self-reporting.

The Kansas City Star reports Gregg Laiben, medical director with Blue Cross and Blue Shield, said the new program is geared toward "outcomes and verifiable activities." It goes into effect Jan. 1.

Earlier this month, six Kansas city public employees and one Jackson County public employee were charged with defrauding the insurance provider in 2010 and 2011. A grand jury indictment accuses the seven of falsely claiming hundreds of thousands of dollars in cash rewards for participating in races and other exercise activities under the "Points to Blue" wellness incentive program.

Each defendant was charged with three counts of wire fraud in the 21-count indictment.

Prosecutors said the group defrauded Blue Cross and Blue Shield of Kansas City out of more than $300,000 through a benefit program launched in April 2010 that allowed members to accumulate points for participating in healthy activities. They received $1 for every 1,000 points earned toward a gift card or preloaded debit card up to $250 annually per member.

Each dependent in a member's household also could get points and gift cards for healthy activities, with a higher point totals assigned to more rigorous exercise, such as long-distance running. The maximum points awarded for a single activity was 10,000 for marathons and triathlons.

Prosecutors said one defendant reported that a 1-year-old child had run a triathlon, a marathon and a duathlon - an endurance race comprised of running and cycling. Prosecutors say defendants logged similar feats for a dozen children 7 years old or younger.

The defendants received a total of 1,253 fraudulent gift cards with a value of $310,960, prosecutors said.

Laiben said he could not comment on the court case and declined to say whether the decision to end the Points to Blue program on Dec. 31 was related to the federal court case.

He said the new program will give points only to employees who complete verifiable activities, such as getting blood pressure checked, completing a survey on lifestyle, participating in educational seminars and engaging with a nurse or a coach. The maximum reward in any given year would be $100, Laiben said.