Benefits Fraud

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Employee Benefits fraud is a growing problem in Canada with losses as high as 10% of total health care spending.  This represents over 2.5 billion in employer sponsored group benefit plan losses.  The myth surrounding benefit fraud is that it only affects insurance companies and does not impact employees or plan sponsors.  This cannot be further from the truth.  Benefits fraud can lead to:

  • Increased Benefit Costs: Fraud results in increased claims which in turn results in increased rates/premium.  Increased costs affect both the employer and employees.
  • Employee claims suspension, repayment of fraudulent claims, job loss, criminal charges, jail time, and fines.

 

Who is Responsible for Benefits Fraud?

Benefits fraud most commonly occurs by employees, service providers, or the employee and service provider working together. 

Common Examples of Benefits Fraud

Employee Fraud Examples

  • False claims submissions
  • Altered claim documents
  • Benefit card swapping or using someone else's coverage
  • Returning items after reimbursement
  • False plan eligibility data
  • Abusing narcotics by visiting multiple doctors and/or pharmacies
  • Forged or stolen prescriptions
  • Out of country claims:
    • Doctors / facilities don't exist
    • Forged documents & stamps

Service Provider Fraud Examples

  • Bill for services that haven't been delivered
  • Providing medically unnecessary treatments
  • Providing false or altered invoices
  • Falsifying procedures performed to receive payment for non-eligible expenses
  • Unnecessary patient referrals
  • Providers who misrepresent themselves as licensed practitioners
  • Billing for
    • Higher priced services
    • Excessive use of time

Benefits Fraud in the News

The Toronto Transit Commission (TTC) has confirmed that more than 100 employees have either resigned or been dismissed as part of a $4 million benefits fraud investigation.  In July 2015, Toronto Police charged the owner of the orthotics store Healthy Fit with fraud over $5,000 and laundering the proceeds of crime.  Two of the store’s employees were charged with the same crimes.  Health Fit allegedly wrote receipts to TTC employees for orthotics, compression stockings and sleeves they didn’t actually buy, or for more money than they actually spent.  The employees and the provider allegedly split the money paid out by the TTC’s insurer at the time.  Investigators are continuing to interview TTC employees who filed claims for Healthy Fit products, according to the TTC.  If evidence proves an employee defrauded the plan, he or she will be dismissed. For the full Benefits Canada article click here.

A Toronto firefighter has been sentenced to six months in jail for benefits fraud.  Bradley Evaschuk, 48, submitted 23 fraudulent health benefits claims and 300 forged invoices, seeking payment of $32,000 between February 2009 and October 2013.  The claims sought repayment for expenses never incurred for services never rendered to Evaschuk, his former common law spouse or their children.  In October 2013, the fraudulent claims ceased after the City of Toronto’s benefits provider advised the account was under audit.  In September 2014, the city suspended Evaschuk from his position.  In January 2017, a jury found Evaschuk guilty of one count of fraud over $5,000.  It also found him guilty of attempting fraud and seven counts of uttering forged documents.  For the full Benefits Canada article click here.

How to Prevent Fraud

Fraud is clearly wrong, but certain types of abuse may not seem wrong to all plan members. Some may think they are entitled to claim all the benefits allotted to them and their dependants every year, even if the products and services claimed are not medically necessary.  And others may not be aware that healthcare providers commit fraud, or how they do it.  The more employees know about the negative impact of fraud and abuse, the better equipped—and more likely—they’ll be to help prevent them.

Below are actions employees and employers can take to help prevent benefits fraud:


How Employees Can Help

  • Keep benefits cards & information in a safe place
  • Do not sign blank claim forms
  • Report providers who ask you to pre-sign forms
  • Make sure the practitioner is licensed with the appropriate regulatory board
  • Question and stay informed about treatments on the insurers group benefit website
  • Complete claim audit questionnaires
  • Review the Explanation of Benefits that accompanies your claims summary

    How Employers Can Help

    • Use plan design options:
      • Co-payment plans keep the plan member involved
      • Set limits for commonly abused services
      • Add a Health Care Spending Account to offer flexibility, while limiting expenses
    • Treat health care fraud seriously - members committing fraud are stealing from your plan
    • Understand the need for claim audits
    • Refer tips or information about fraud to the insurer
    • Support plan member education

       

      For more information regarding benefits fraud or other Benefits related advice contact Benefit Consultants Inc. at contact@bcibenefits.ca or call 1.800.667.2973

       

      Sources:

      https://www.clhia.ca/antifraud

      https://www.manulife.ca/wps/wcm/connect/76dc2e3b-749f-464f-ac81-e1de86f91192/preventinge.pdf?MOD=AJPERES&CACHEID=76dc2e3b-749f-464f-ac81-e1de86f91192

      http://www.benefitscanada.com/news/100-ttc-employees-fired-resigned-over-benefits-fraud-investigation-96139

      http://www.benefitscanada.com/benefits/health-benefits/firefighter-sentenced-to-six-months-in-jail-for-benefits-fraud-103404

      https://www.desjardinslifeinsurance.com/en/group-plans/Documents/14827e-age-brochure-anti-fraude.pdf