Feds, Insurers Turn Up Heat on Health Care Fraud.

WASHINGTON -- Increased public and private antifraud efforts paid off last year as the Federal Bureau of Investigation charged 741 people with health care fraud and recovered $290 million for public and private insurers, Dennis Lormel, the bureau's financial crimes section chief, said at a press briefing on health care fraud sponsored by the Blue Cross/Blue Shield Association.

Insurers and law enforcement officials have been increasing their efforts to catch those who commit health care fraud, which costs American consumers $30 billion annually. The Blue Cross/Blue Shield Association recently named one of its plans' fraud investigators, David Ignatius, as the association's new national antifraud director. Meanwhile, Mr. Lormel said the federal government also has been devoting increasing resources to health care fraud investigations.

Not surprisingly, the Internet is emerging as a new venue for health care fraud. Darrell Langlois, deputy compliance officer for Blue Cross/Blue Shield of Louisiana in Baton Rouge, discussed one half-million-dollar scheme involving a psychologist who used the Internet to sell a "cure" to patients with chronic fatigue syndrome (CFS).

The psychologist would get CFS patients to send blood samples through the mail and then run them through a machine that would purportedly identify what

drugs the patients were allergic to and what medications they should be taking for their fatigue. He billed various insurers--including the Louisiana plan--a total of $500,000 for these tests, Mr. Langlois said.

Plan investigators learned that the test was not valid and shut down the operation. The man later moved to Georgia, but died of natural causes before he could be prosecuted.

Selling medications that turn out to be worthless--and sometimes billing insurers for the products--is another common fraud that has made the leap to cyber space, William J. Mahon, executive director of the National Health Care Antifraud Association, said in an interview.