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Press Release

IBC Receives Top Honors for Anti-Fraud Efforts from Blue Cross and Blue Shield Association

Philadelphia, PA - May 23, 2005 - Independence Blue Cross' (IBC) anti-fraud efforts have been recognized as part of the Blue Cross and Blue Shield Association's (BCBSA) BlueWorks® program. Winners were announced as part of the BCBSA's 2005 National Internal Audit and Anti-Fraud conference, with IBC receiving top-honors in two of eight categories, the Program and Investigation categories.

“Improving health care quality, safety and affordability for our members has always been a top priority for IBC, and we're pleased that the Blue Cross and Blue Shield Association has recognized our efforts to combat health care fraud,” said Joseph A. Frick, president and CEO. “Our anti-fraud program is an integral part of our efforts to keep health care costs low, and I am pleased that the Blue Cross and Blue Shield Association and Harvard Medical School's Department of Health Care Policy have recognized this innovative and important program.”

Health care fraud is a crime that increases health care costs, causes physical harm to unwitting patients and jeopardizes the quality of health care services. The cost of this fraud has reached an estimated $90 billion in the United States, which is about five percent of total U.S. health care costs for 2004.

IBC was recognized for its “Refocused Initiative on Fraud and Abuse,” an effort undertaken by a multi-disciplinary team known as the Corporate and Financial Investigations Department (CFID). The CFID conducted fraud investigations which resulted in the recovery of more than $30 million in 2004 resulting from overpaid, abusive and fraudulent claims. Additionally, the unit referred 52 individuals to law enforcement for criminal investigation, with 19 individuals sentenced for crimes related to health care fraud.

IBC also was recognized for its investigation of a mental health fraud scheme in Pennsylvania which resulted in the court ordered restitution of more than $1 million and placed the CEO of the fraudulent clinic in prison.

In this scheme, the Plan received fraudulent claims submitted by the CEO wherein an unsuspecting psychiatrist's identity was used. This “stolen” identity was used on hundreds of fraudulent claims containing false diagnosis, fictitious visits, inflated patient consultation times, and counseling rendered by unlicensed employees. By illustration, the resulting fraudulent claims billed the Plan for in excess of 60 hours in one day relating to more than 50 patients. Fraud investigators used ingenuity, surveillance, an undercover investigator, interviewing skills and data-mining software to prove these claims were fraudulent. The case earned the name “A Little Birdie Told Me” after CFID investigators were able to track the Web log postings of the “unwitting” psychiatrist whose ID was stolen. While traveling abroad pursuing a bird-watching hobby, the psychiatrist posted ornithology accounts online on the same days the fraudulent claims were made.

“Ultimately, IBC's anti-fraud initiatives will help to control the rising cost of health care for our members,” states Frick. “We take seriously our responsibility to make sure that our customers' premium dollars are spent responsibly and that our members receive appropriate and safe medical treatment.”

Independence Blue Cross is the leading health insurer in Southeastern Pennsylvania. Nationwide, IBC and its affiliates provide coverage to nearly 3.5 million people.