When a dozen insurance companies from around the country filed a lawsuit this month alleging massive fraud at surgery centers in Southern California, it was a milestone for the chief fraud investigator at Highmark, Inc.

	Darrell Sapp, Post-Gazette Thomas Brennan Jr., in the hallway of Highmark's offices at Fifth Avenue Place, Downtown, is the chief fraud investigator for the health insurance giant. Click photo for larger image.

Thomas Brennan Jr., helped unravel a scam that Highmark says led dozens of its patients, including a few from Pittsburgh, to California for unneeded procedures. The patients received several hundred dollars each in a scheme that reaped millions of dollars in insurance reimbursements for the surgery centers, according to the lawsuit brought by Highmark and 11 other Blue Cross and Blue Shield companies.

Health-care fraud is a big deal, Brennan said, citing a federal government estimate that 3 to 5 percent of the nation's $1.7 trillion health-care tab is lost to fraud and abuse. According to the National Health Care Anti-Fraud Association, which Brennan chairs, fraud is one of many factors contributing to the steady rise in health-care costs.

For employers, health insurance premiums rose 59 percent between 2000 and 2004, according to the Kaiser Family Foundation. The California case shows fraud also can endanger patients' health.

"With what's transpired in Southern California, you have individuals who are actually cutting people to justify billing," Brennan said in an interview this week. "They know that when you examine the medical records and examine the patients, you're going to see that services were rendered."

The lawsuit, which was filed March 10 in federal court in Los Angeles, seeks recovery of more than $30 million from nine surgery centers, seven medical management companies and 34 individuals allegedly involved in the "Rent-a-Patient" scheme. It allegedly was carried out through paid recruiters who enlisted patients to travel to the surgery centers and undergo needless and sometimes hazardous procedures ranging from colonoscopies to an operation that corrects sweaty palms.

Brennan recalled interviewing one patient who claimed he underwent a circumcision after being approached by a recruiter in the men's room.

"The recruiter came in and said, 'Hey, yours looks like a Volkswagen. Do you want a Mercedes that looks like mine? Come on, I'll take you to California,' " Brennan said. "When our medical director examined him, he still had a piece of wire in him that they used to suture him up, and his girlfriend, who was doing the translating, said to me: 'It no work no more.' "

During the trip, the patient also underwent two procedures that he did not need, Brennan said.

Recruiters selected patients who had good health insurance but earned low wages, Brennan said. Their incomes made them more likely to take money for a California weekend of sun and surgery.

Patients from Pittsburgh and other far-away places were flown in and stayed in hotels, Brennan said. Phoenix patients made the trip by rental passenger vans. After the surgeries, the lawsuit claims, the providers submitted fraudulent insurance claims.

The scheme came to light when some of the patients from Phoenix received insurance reimbursement and kept the money instead of turning it over to the surgery centers. When the medical providers sued them, a journalist in Phoenix investigated and exposed the scam in 2003.

Brennan said some of the fraudulent procedures date to 1999.

The Pittsburgh office of the FBI was one of the first law enforcement agencies to get involved in the investigation, Brennan said. He said the district attorney of Orange County, Calif., has filed criminal charges against some of the defendants named in the insurance companies' lawsuit.

When the lawsuit was announced at a news conference in Washington D.C., Brennan was one of seven investigators who spoke.

"Tom played a very vital role," said Byron Hollis, national anti-fraud director at the Blue Cross Blue Shield Association, based in Washington, D.C. "The information that he gleaned and the relationship that he developed with the law enforcement agencies was crucial."

The Rent-a-Patient scheme was uncommonly large and bold. Brennan's 18-person staff at Highmark's special investigation unit more routinely investigates everything from doctors writing fraudulent painkiller prescriptions to providers billing for procedures that weren't done.

Brennan works out of the Harrisburg area, and his unit responds to about 500 calls per month on its fraud hot line. He came to Highmark in 1995 after a long career with the Pennsylvania State Police and several years as a major case analyst with the FBI Behavioral Science Unit in Quantico, Va.

As health-care expenditures grow and new procedures are offered, the opportunities for fraud increase, Brennan said. Consumers can take one simple step to stem the tide.

"When you get that explanation of benefit form that says 'This is Not a Bill,' read it. And if you question something, call us," Brennan said. "If you don't, you won't know whether your insurance company is paying for services you really didn't receive."