Insurer Escalates Fight Against Health Care Fraud

Apr 11, 2001, 01:00 ET from Regence BlueCross BlueShield of Oregon

    PORTLAND, Ore., April 11 /PRNewswire/ --Beginning April 2001,
 Regence BlueCross BlueShield of Oregon will have a formidable ally to help it
 identify fraud and abuse activities.  "With IBM's Fraud and Abuse Management
 System (FAMS), we'll be able to generate information in one day that now takes
 us several weeks to extract from our systems," says John Taylor, manager of
 the fraud and abuse unit at Regence BlueCross BlueShield of Oregon.  "We'll be
 more efficient, so we can investigate more cases, plus we'll be able to
 identify instances of fraud proactively, rather than relying primarily on tips
 from employees who see a trend, or from outside sources that call our
 hotline."
     According to the National Health Care Anti-Fraud Association, health care
 fraud costs American consumers $30 billion annually.  While it's estimated
 that only two to five percent of providers actually commit fraud, their
 combined financial impact is tremendous.  To protect the interests of their
 customers, insurers must be able aggressively to detect aberrant billing
 activities, investigate those cases, and recover the money taken by those who
 know how to abuse the system.
     "We need to be as sophisticated as the people who are committing the
 crimes," says Doug Schaefer, a senior programming analyst in Regence BlueCross
 BlueShield of Oregon's fraud and abuse unit.  "The sheer volume of data we
 receive into our claims systems everyday makes it difficult to quickly
 retrieve the information we need to investigate fraud and abuse.  FAMS will
 help us get to that data in a number of different ways.  For instance, it will
 show us how many patients a physician has treated, how many claims he or she
 has submitted, and how much we've paid per patient.  When we model that
 against similar providers, we'll clearly see the billing practices that fall
 outside of the norm."  According to Schaefer, the FAMS reports will also help
 state and federal prosecutors more readily recognize that a crime may have
 been committed.
     Regence BlueCross BlueShield of Oregon is part of the Regence Group, which
 also includes Regence BlueShield in Washington, Regence BlueShield in Idaho,
 and Regence BlueCross BlueShield of Utah.  The FAMS system will eventually be
 deployed throughout the Regence Group using a shared database.
     John Tolton, manager of the fraud and abuse unit with Regence BlueShield,
 cited a recent case that would have "shot to the top" if FAMS modeling had
 been available to them last year.  Nasser Ordoubadi, M.D., a Bellevue
 physician and former radio host of a local program called "The Medicine Man,"
 pleaded guilty on August 4, 2000, to two felony counts of conspiracy to commit
 mail fraud and health care fraud.  Each count carries a maximum possible
 sentence of five years imprisonment and a $250,000 fine, plus victim's
 restitution.  Dr. Ordoubadi entered his guilty pleas three weeks before he was
 to be tried on 33 federal criminal charges.
     Acting on a tip, Regence BlueShield had audited the claims submitted from
 Dr. Ordoubadi's five clinics.  It found that Dr. Ordoubadi had misrepresented
 the level of treatment he provided by using codes relating to more complex
 care, and by describing services that would not be paid by insurance as
 eligible services.
     "Fraudulent billing practices of this nature are sometimes difficult to
 detect in today's environment," says Tolton.  "FAMS will act as a hidden
 sentinel, allowing us to identify crimes that may have fallen below our radar
 before.  This will help to ensure that the money our groups and subscribers
 devote to health care actually reaches the overwhelming majority of our
 contracted physicians who bill honestly and appropriately for covered
 services."
 
     About Regence BlueCross BlueShield of Oregon
     Regence BlueCross BlueShield of Oregon (Regence BCBSO) is the state's
 largest health insurance company with more than more than 1 million
 subscribers-nearly one in every three Oregonians.  Regence BCBSO is a
 not-for-profit company, headquartered in Portland, serving Oregon and
 Southwest Washington.
 
 

SOURCE Regence BlueCross BlueShield of Oregon
    PORTLAND, Ore., April 11 /PRNewswire/ --Beginning April 2001,
 Regence BlueCross BlueShield of Oregon will have a formidable ally to help it
 identify fraud and abuse activities.  "With IBM's Fraud and Abuse Management
 System (FAMS), we'll be able to generate information in one day that now takes
 us several weeks to extract from our systems," says John Taylor, manager of
 the fraud and abuse unit at Regence BlueCross BlueShield of Oregon.  "We'll be
 more efficient, so we can investigate more cases, plus we'll be able to
 identify instances of fraud proactively, rather than relying primarily on tips
 from employees who see a trend, or from outside sources that call our
 hotline."
     According to the National Health Care Anti-Fraud Association, health care
 fraud costs American consumers $30 billion annually.  While it's estimated
 that only two to five percent of providers actually commit fraud, their
 combined financial impact is tremendous.  To protect the interests of their
 customers, insurers must be able aggressively to detect aberrant billing
 activities, investigate those cases, and recover the money taken by those who
 know how to abuse the system.
     "We need to be as sophisticated as the people who are committing the
 crimes," says Doug Schaefer, a senior programming analyst in Regence BlueCross
 BlueShield of Oregon's fraud and abuse unit.  "The sheer volume of data we
 receive into our claims systems everyday makes it difficult to quickly
 retrieve the information we need to investigate fraud and abuse.  FAMS will
 help us get to that data in a number of different ways.  For instance, it will
 show us how many patients a physician has treated, how many claims he or she
 has submitted, and how much we've paid per patient.  When we model that
 against similar providers, we'll clearly see the billing practices that fall
 outside of the norm."  According to Schaefer, the FAMS reports will also help
 state and federal prosecutors more readily recognize that a crime may have
 been committed.
     Regence BlueCross BlueShield of Oregon is part of the Regence Group, which
 also includes Regence BlueShield in Washington, Regence BlueShield in Idaho,
 and Regence BlueCross BlueShield of Utah.  The FAMS system will eventually be
 deployed throughout the Regence Group using a shared database.
     John Tolton, manager of the fraud and abuse unit with Regence BlueShield,
 cited a recent case that would have "shot to the top" if FAMS modeling had
 been available to them last year.  Nasser Ordoubadi, M.D., a Bellevue
 physician and former radio host of a local program called "The Medicine Man,"
 pleaded guilty on August 4, 2000, to two felony counts of conspiracy to commit
 mail fraud and health care fraud.  Each count carries a maximum possible
 sentence of five years imprisonment and a $250,000 fine, plus victim's
 restitution.  Dr. Ordoubadi entered his guilty pleas three weeks before he was
 to be tried on 33 federal criminal charges.
     Acting on a tip, Regence BlueShield had audited the claims submitted from
 Dr. Ordoubadi's five clinics.  It found that Dr. Ordoubadi had misrepresented
 the level of treatment he provided by using codes relating to more complex
 care, and by describing services that would not be paid by insurance as
 eligible services.
     "Fraudulent billing practices of this nature are sometimes difficult to
 detect in today's environment," says Tolton.  "FAMS will act as a hidden
 sentinel, allowing us to identify crimes that may have fallen below our radar
 before.  This will help to ensure that the money our groups and subscribers
 devote to health care actually reaches the overwhelming majority of our
 contracted physicians who bill honestly and appropriately for covered
 services."
 
     About Regence BlueCross BlueShield of Oregon
     Regence BlueCross BlueShield of Oregon (Regence BCBSO) is the state's
 largest health insurance company with more than more than 1 million
 subscribers-nearly one in every three Oregonians.  Regence BCBSO is a
 not-for-profit company, headquartered in Portland, serving Oregon and
 Southwest Washington.
 
 SOURCE  Regence BlueCross BlueShield of Oregon