Insurer finds ills with doctor bills.

• Position: Blue Cross and Blue Shield of North Carolina fraud prevention - Brief Article

Two years ago, Blue Cross and Blue Shield of North Carolina Inc. beefed up fraud detection. New sleuth software began scanning bills, and anonymous tips from disgruntled clinic employees suddenly got top priority. Patients were urged to dial a new, widely publicized hotline.

In 1999, fraud collections by the largest Tar Heel health insurer jumped a third, to $6 million. Last year, $5 million was recouped.

Derric Gregory, vice president of corporate audit services at Chapel Hill-based Blue Cross, says honest doctors have nothing to fear. "If you're averse to it, there might be some practices within your practice you need to review." Gregory estimates that 95% of fraud cases are detected through tips. But physicians don't like hotlines. The 250,000-member American Medical Association, the North Carolina Medical Society and others have passed resolutions condemning them.

Doctors contend there's more afoot than fraud detection. Managed-care insurers are trying to intimidate them into lowering bills by ordering...