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Blue Cross and Blue Shield Plans Recognized for Fighting Fraud; Healthcare Fraud Costs American Consumers $90 Billion a Year


WASHINGTON, May 23 -- Blue Cross and Blue Shield Companies across the country are leading the fight against healthcare fraud, a dangerous crime that increases healthcare costs, causes physical harm and jeopardizes the quality of healthcare services. The national cost of healthcare fraud is estimated at $90 billion, or about five percent of the total $1.8 trillion spent on healthcare in 2004.

Leading researchers from Harvard Medical School today recognized anti-fraud efforts by three Blue Cross and Blue Shield companies as part of the BlueWorks program, a unique collaboration between the Blue Cross and Blue Shield Association (BCBSA) and Harvard Medical School’s Department of Health Care Policy. The program selects and evaluates innovative Blue Cross and Blue Shield Plan solutions to keeping quality healthcare affordable. Winning programs are promoted throughout the Blue System and the healthcare industry.

“Improving healthcare quality, safety and affordability are our top priorities,” said BCBSA President and CEO Scott P. Serota. “The more people know about healthcare fraud and understand the role they can play in preventing it, the better for us all -- we all benefit in the long-run.”

The BlueWorks anti-fraud winners were announced as part of BCBSA’s 2005 National Internal Audit and Anti-Fraud Conference being held in Scottsdale, AZ. The winning Blue Plan initiatives were recognized as models of “strategic investment” in the first anti-fraud competition for this program.

Independence Blue Cross is recognized by BlueWorks for its investigation of a mental health fraud scheme in Pennsylvania. The successful case, referred to as “A Little Birdie Told Me,” resulted in repayments of more than $1 million and placed the CEO of a fraudulent clinic in prison.

In this scheme, the Plan received fraudulent claims submitted by the clinic’s CEO wherein an unsuspecting psychiatrist’s identity was used. The stolen identity of one of these physicians was used and the other two provider identities were forged. The total resulting fraudulent claims billed the Plan for a total of 60 hours a day and more than 50 patients. Fraud investigators used ingenuity, surveillance, undercover investigators, and data-mining software to prove these claims were fraudulent. The case earned its name by tracking the Web log postings of the psychiatrist whose ID was stolen. While traveling abroad pursuing her bird-watching hobby, the psychiatrist posted ornithology accounts online on the same days the claims were made.

Blue Cross and Blue Shield of Massachusetts was recognized for its “Provider Amnesty” program, which is modeled after initiatives used by government taxation authorities. The program has resulted in 285 providers agreeing to repay almost $2.3 million in overpayments. BlueWorks judges recognized this program because of it’s adaptability to other situations. The program works by enlisting the alliance and assistance of provider organizations while offering their members a way to partner with the Plan in the efforts against healthcare fraud.

Independence Blue Cross also was recognized for its “Refocused Initiative on Fraud and Abuse,” an effort undertaken by a multi- disciplinary anti-fraud team within the Plan. Known as the Corporate and Financial Investigations Department, this unit achieved recoveries of $30 million in 2004, with 19 individuals sentenced for fraud crimes. BlueWorks judges recognized this initiative because it made healthcare fraud a top issue for the entire Plan. Strong support from senior management and collaboration among team members from the legal, pharmacy and public policy staff raised the profile of anti-fraud efforts and enabled the Plan to influence public policy by helping block restrictive legislation limiting health plans’ ability to recoup overpayments.

Anthem Blue Cross and Blue Shield’s “Fraud and Abuse Awareness Training” program is a Web-based training initiative using real- life examples to help staff recognize and respond to signals of healthcare fraud. This program is flexible and easy to use while it saves time and resources by replacing annual face-to-face trainings. Participants rated it highly with 92 percent of the employees who trained on it saying the format is easy to use and helped in their recognition of fraud. The program was recognized by BlueWorks because of its flexibility, simplicity of use, outstanding accountability and ease of replication by other Plans.

“These anti-fraud programs show that innovation, creativity, and most importantly, support from upper management can produce real results,” said Barbara McNeil, M.D., chair of Harvard Medical School’s Department of Health Care Policy. “In addition, these efforts are not unique to a specific organization, but can be adapted by other health plans. Out of this program, we hope these models of ’strategic investment’ against healthcare fraud are adapted and used by other Blue and non-Blue health insurers.”

The BlueWorks program, launched in October 2003, also has recognized 16 other Blue Cross and Blue Shield Plan programs that are helping to keep quality healthcare affordable in communities across the country. For a complete list of BlueWorks winners, go to


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