Blue Cross And Blue Shield Companies' Anti-Fraud Efforts Recover $350 Million In 2008
Five BCBS companies receive recognition for outstanding programs and investigations
June 30, 2009
WASHINGTON – Blue Cross and Blue Shield companies' anti-fraud investigations resulted in overall savings and recoveries of nearly $350 million in 2008, an increase of 43 percent from 2007, according to data released today by the Blue Cross and Blue Shield Association (BCBSA) National Anti-fraud Department (NAFD). From 2007 to 2008, the number of cases opened increased nearly 34 percent, and the closed cases increased about 43 percent.
The National Health Care Anti-Fraud Association estimates that about 3 percent of all healthcare spending – or $68 billion – is lost to healthcare fraud annually. The combined savings and return for all Blue Cross and Blue Shield companies' anti-fraud units, or Special Investigative Units (SIUs), was about $7 dollars for every $1 dollar spent on anti-fraud efforts.
"Blue Cross and Blue Shield companies are industry leaders in detecting and pursuing fraud," said Scott P. Serota, BCBSA president and CEO. "Our statistics are a direct reflection of the private sector's success at rooting out fraud and abuse – saving significant healthcare dollars and protecting consumers from unnecessary or even harmful medical care."
Blue Companies Showcase Anti-fraud Programs and Investigations
Each year, in partnership with the Harvard Medical School Department of Health Care Policy, BCBSA, through its BlueWorks® program, recognizes innovative Blue Cross and Blue Shield companies' anti-fraud investigations and programs that have identified and promoted best practices in the areas of investigation and prosecution, fraud risk identification, mitigation, and prevention. This year, five Blue Cross and Blue Shield companies were recognized for their innovative investigations and programs including:
Blue Cross and Blue Shield of Illinois
Investigation: Improper Billing
After receiving anti-fraud hotline and FBI calls, the Blue Cross and Blue Shield of Illinois (BCBSIL) SIU found that a provider had submitted inappropriate bills and was threatening to send patients to collection agencies. They discovered billing for services not rendered, unfair balance billing and charging separately for individual parts of a single service. The physician pled guilty and paid a fine and restitution totaling $2.5 million. The office manager also pled guilty and is expected to receive jail time. BCBSIL has placed a new edit in its system to prevent similar future payments and better protect consumers against inappropriate bills.
Independence Blue Cross (Pennsylvania)
Investigation: Cooking the Books
Independence Blue Cross investigators teamed with the FBI and the U.S. Postal Inspector to convict a gynecologist who had submitted more than $600,000 worth of false claims and fabricated medical records. He received an 83-count indictment on mail fraud as well as counts of healthcare fraud, false statements in a healthcare matter, and aiding and abetting. He was convicted on all counts and is awaiting sentencing.
Highmark Inc. (Pennsylvania)
Investigation: Noncovered Procedures
Highmark Inc. SIU investigators discovered noncredentialed chiropractors working in a provider's office who were billing patients for noncovered procedures. They also found fabricated records and more than $3.6 million in fraudulent claims. Joining forces with the U.S. Postal Service, the FBI, and the IRS, and aided by the assistant U.S. attorney, the Highmark SIU helped convict the physician. The physician was sentenced to four years in prison and paid more than $12 million in restitution. Other defendants paid $2 million in restitution and were sentenced to jail.
Anthem Blue Cross (California)
Program: Phantom Durable Medical Equipment and Labs
Fraudulent medical equipment and diagnostic testing labs are some of the most serious healthcare fraud offenders, especially against Medicare and Medicaid. Anthem Blue Cross of California's SIU established a proactive identification program to identify "phantom" durable medical equipment companies and laboratories. The SIU investigators prevented false claim payments to these phony companies and out of 500 new providers investigators identified 10 percent as invalid business entities. News coverage of this operation decreased requests for new provider identification numbers and saved millions of dollars.
Program: Operation Pillbox
Data mining helped Anthem Blue Cross of California's SIU to determine there were physicians prescribing large quantities of Actiq, a strong narcotic in lollipop form. This discovery led to the establishment of a Pharmacy Integrity Committee which uncovered evidence resulting in the conviction of several pharmacies and physicians on criminal drug dealing charges. Two physicians were criminally charged and three others lost their medical licenses.
Blue Cross and Blue Shield of Florida
Program: Questionable Manipulation under Anesthesia
Acting on a National Health Care Anti-Fraud Association alert, the Blue Cross and Blue Shield of Florida's (BCBSF) SIU investigated and discovered there were no guidelines prohibiting payment for receiving chiropractic services under anesthesia. BCBSF medical directors determined that this practice posed significant clinical risk and clarified existing medical policies while creating new ones to protect consumers. The investigators helped implement new prepayment system edits to capture related procedure codes. These changes saved almost $7.5 million in 2008.
"These investigations and programs illustrate how Blue Cross and Blue Shield companies are actively combating fraud," said Byron Hollis, managing director of BCBSA's NAFD. "We are protecting consumers and saving healthcare dollars by developing preventive programs and working in partnership with consumers, law enforcement, and authorities to investigate potential fraud cases."
Blue Cross and Blue Shield members can report suspected fraud through a national hotline number, 1.877.327.BLUE, and Web site (www.bcbs.com/blueresources/anti-fraud/report-fraud.html).
The Blue Cross and Blue Shield Association is made up of 39 independent, locally operated Blue Cross and Blue Shield companies that collectively provide healthcare coverage for nearly 102 million Americans. For more information on the Blue Cross and Blue Shield Association and its member companies, please visit www.BCBS.com.
