When the Chicago-based Blue Cross and Blue Shield Association was seeking its first-ever director of national anti-fraud initiatives, it didn't have to look very far.
The association, whose members insure 75 million people, selected David Ignatius, 53, to fill the high-profile slot.
Ignatius, a native of Madera, Calif., most recently headed the Blues-administered Federal Employees Health Benefits Program in Washington. He brings nearly 30 years of law enforcement experience to the job.
The Arlington, Va., resident will work in the association's Washington office to help coordinate the response to national fraud investigations, integrate databases among the many plans, provide training and investigative support, and circulate national fraud alerts.
Ignatius, a former Tustin, Calif., police sergeant and Orange County, Calif., district attorney's office investigator, cut his healthcare teeth with California Blue Cross as a senior fraud investigator and manager. He earned acclaim in 1992 for spearheading one of the first big national healthcare fraud investigations, a Blues probe of a weight-loss firm owned by Houston-based Paracelsus Healthcare Corp. that was advertising on national television shows and magazines.
"They were recruiting Blues members to call toll-free numbers, and they offered free airfare and 30 days of fun in the sun with weight-loss treatments through eight Paracelsus hospitals," Ignatius recalled. "Blues plans were getting billed $60,000 per month (by the firm). It was a giant case, and we had literally thousands of people coming to California for these programs." The company has paid out tens of millions of dollars in settlements with insurers over the dispute and has faced government investigations as well.
His work on that case and others caught the eye of the national association, which promoted him to manager of investigations for the Federal Employees Health Benefits Program in 1995. That program covers 2 million federal employees and 4 million dependents, and is the largest private health plan in the country.
Bill Mahon, president of the Washington-based National Health Care Anti-Fraud Association, said Ignatius brings irreplaceable anti-fraud experience to his new role.
"I think with the hiring of David and Michael Joyce (for the newly created position of director of compliance and internal audits), the Blues are sending a message," Mahon said. "They're also acknowledging that healthcare fraud is affecting their plans."
Russell Streur, supervisor of the fraud investigations unit of Blue Cross and Blue Shield United of Wisconsin, said Ignatius will be "a valuable resource for us and other plans. He was one of the driving forces behind the inpatient psychiatric investigations in the early 1990s and provided good advice on how to proceed and what to look for."
In spite of the top support--Ignatius was backed by Blues association President and Chief Executive Officer Scott Serota--Ignatius will have his hands full.
The 48 Blues plans operate independently, and many have not historically shared information or support. And the plans have not only been hit by fraudulent healthcare providers, they've also been caught with their hands in the cookie jar. Nine Blues plans serving as Medicare fiscal intermediaries and carriers have paid more than $280 million to resolve civil and criminal healthcare fraud allegations (Aug. 16, 1999, p. 36).
Blues association spokesman William Pierce said the plans' recent fraud troubles played a small role in Ignatius' hiring.
"We take those issues very seriously, but this has been in the works for some time," Pierce said.