When it comes to battling managed care fraud, the Blue Cross and Blue Shield Association takes the long view. The health insurer’s latest salvo against alleged medical crookedness was splashed across headlines around the country last month when news broke about the notorious rent-a-patient scam.

Recap: Twelve BCBSA plans filed a $30 million civil suit against nine outpatient surgery clinics in southern California, seven medical management companies, and 34 individuals. The suit alleges that hundreds of "patients" from across the country signed on to undergo unnecessary surgery. Tens of millions of dollars of fraudulent medical claims were filed.

The scheme is believed to be the first major scam in which clinics and surgeons allegedly paid healthy patients to actually undergo invasive and risky procedures, according to BCBSA. It was carried out through the use of paid recruiters to enlist patients to travel to the California-based surgical centers and undergo needless and sometimes hazardous surgical procedures and treatments. In return, the lawsuit alleges, the patients received cash payments or cosmetic surgery, and the providers submitted fraudulent insurance claims.

"This filing is a significant milestone in the fight against health care fraud," says Thomas Brennan, Jr., chairman of the National Health Care Anti-Fraud Association (NHCAA) and director of special investigations for Highmark Blue Cross Blue Shield. "This effort is important to NHCAA’s mission and the success of our nation’s health care system."

Brennan has been saying for years that health plans need to focus more on this problem. In October 2002, he told Managed Care that, "A lot of individuals were under the impression that with managed care, the ability to commit health care fraud was no longer going to be there. They were highly mistaken."

That’s the main reason health plans have been slow to battle fraud, even though the potential recovery is impressive.

"You’re talking about these individuals out there being unscrupulous individuals getting involved in undertreatment and overtreatment," Brennan said in 2002.

Brennan, a former Pennsylvania state police officer and a former analyst with the FBI’s behavioral science unit, told us that top management in health plans must be willing to make a significant investment in order for antifraud efforts to be successful.

"You have to have the support of senior management," Brennan said. "What you have to understand is that even though the number of unscrupulous providers is small, because of what they do and how they do it, they can still have a huge impact on our health care system."

So can Brennan, as he proved last month.

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Shelley Slade
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