By Ned Stafford

FRANKFURT (Reuters Health) – State and local prosecutors in the German state of Hessen have begun a major investigation into billing fraud by hundreds of physicians.

Currently 350 to 400 doctors are suspected of fraud, and that number will likely go higher, the head district attorney in Limburg, Almuth von Anshelm, told the Frankfurter Neue Presse on Wednesday.

The case is so large that authorities have rented a 200-square-metre office for the investigation, she told the newspaper. The office is now filled with "mountains" of doctors' patient billing files for services, tests and treatments.

The Hessen Criminal Office also will participate in the investigation. In total, a team of 20 people will be involved, she said.

Anshelm was out of the office Thursday and not available for comment. However, a source within the office, speaking with Reuters Health on condition of anonymity, confirmed the details of the Neue Presse story.

The source said that the Private Physicians Clearing House (PVS), the Limburg-based company that processes medical bills for doctors, also is suspected of fraud. There are many such "clearing houses" throughout Germany for processing medical bills for patients who are either not insured or are insured by private companies. Most Germans are covered by state-backed health insurance companies, which generally do not cover the cost of as many services as the private companies.

Kurt Weser, managing director of Limburg PVS, would not comment in detail on the case. "I can only say that our lawyers have been in contact with the district attorney's office," he told Reuters Health. "The investigation has only just begun, and it is too early to comment."

The source in the Limburg district attorney's office said that the office was tipped off about the suspected fraud by authorities in Koblenz, which is in the state of Rhineland Palatinate. Authorities there were investigating a doctor there who used the Limburg PVS services.

A closer look at the Limburg PVS uncovered the other suspected cases of fraud, he said. When investigators start digging deeper in to the files, he believes hundreds of additional doctors suspected of fraud will be found.

The doctors currently under suspicion practice throughout Hessen, including Frankfurt, he said. Authorities in Rhineland Palatinate and North Rhine Westphalia also are investigating hundreds of doctors suspected of fraud, he said.

The source said it was not yet possible to estimate the value of the suspected frauds, but said it will likely be in the "millions of marks."

He said the issue of fraud is not new in Germany, but the current case has the potential to reverberate far beyond the state of Hesse. If Limburg investigators discover suspected fraud by doctors who use the Limburg PVS but practice in another state, then the appropriate authorities will be notified, he said.

About 3 weeks ago, Gernot Kiefer, a board member of the Innungskrankenkassen (IKK), a health fund covering 4.5 million craftspeople and other workers, made waves among physicians groups by alleging in a newspaper interview that doctors collect as much as 770 million euros a year from filing false claims.

Kiefer said that in 2000 there were 17,400 judicial inquiries against 1600 physicians accused of fraud, up 30% from inquires in 1999. Common frauds include doctors filing claims for "long-dead patients" or for laboratory tests that are not done, he said.

The head of two doctors groups, the German Medical Society and the German Union of Health Fund Physicians, issued a blistering 100-word press release criticizing Keifer for the comments, saying that health insurance companies wasted money building fancy office buildings and paying management huge salaries and pensions.