September 4, 2018
The Canadian Institute for Health Information expected 2017 health care spending in Canada to be a whopping $242 billion. The Canadian Health Care Anti-fraud Association reports that 2-10% of all health care spending is lost to fraud. That means that $4.8 to over $24 million is lining the pockets of immoral, unethical criminals and you and your employees are paying the cost.
Some people seem to think that insurance companies have bottomless pits of money so defrauding them isn’t hurting anyone. However, that is not the case at all. The money insurance companies use to pay claims comes directly from employers in the form of premiums and sometimes those premiums are shared with employees. When premiums go up, it puts the sustainability of benefit coverage in jeopardy.
In its most innocuous form, fraud is abuse and misuse of plan funds. This may include back-dating a date of hire to allow an employee’s claim to go through, claiming a service (ex. massage therapy) that is for a pampering service as opposed to a medical need. At the other end of the spectrum are elaborate schemes involving service providers and employees collaborating to deliberately defraud the plan.
When caught, the lucky ones will simply have to pay back the plan. However, more deliberate acts can lead to termination of benefits, loss of employment, criminal charges, fines, and/or jail time. Life with a criminal record can limit employment opportunities, travel, and impact personal relationships.
Any party that has contact with a benefit plan has a duty to protect the integrity of that plan. This includes, plan administrators, employees, service providers, and insurance companies. Insurance companies have invested in state-of-the-art anti-fraud systems to red-flag claims that are suspicious (ex. is the service provider near the patient’s home or workplace?), and maintain a database of service providers who are under review. Reputable service providers will keep their registration with their college or association in good standing and issue receipts that include their name, credentials, address & phone number, and date of service.
What can employers do?
- Maintain accurate records
- Promote a culture that discourages such behaviour
- Educate and inform employees – see employee flyer: GMS Fraud Prevention
- Design a plan that includes frequency limits, deductible, and/or coinsurance to keep employees financially involved and encourage active management of their benefit expenditures
- Report suspected abuses to the insurance company’s fraud hotline.
What can employees do?
- Verify credentials and reputation of service providers and be wary of those who charge differently depending on insurance coverage
- Verify the invoice is for services rendered
- Question why a service/device is required
- Review claims history to ensure it is accurate
- Never sign blank forms or provide others access to their online account
- Report suspicious activity to HR or the insurance company fraud prevention hotline.
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