Scams costs employers more by driving up claims costs
In one way or another, all Canadians pay for health and dental benefits fraud. In North America alone, it is estimated that hundreds of millions of healthcare dollars are lost to this kind of fraud every year. And that’s why Canada’s life and health insurers are working together to create new strategies and tools to detect, supress, and prevent health and dental benefits fraud.
A recent survey by Abacus Data found that 88 percent of those who have workplace benefits value their plans. A similar number – 84 percent – say their benefits plans have been very helpful (36 percent) or quite helpful (48 percent) in saving them money on medications, dental and vision care, and other health services.
But there’s another side to workplace benefits. You’ve probably heard a story like this:
Mary, a plan member, goes to a clinic for treatments that are covered by her workplace benefits plan. The clinic also offers laser skin treatments that she would love to have done, but that are too pricey and aren’t covered by her benefits. The clinic owner sees that Mary has a plan with lots of paramedical coverage. He offers to provide her with a gift certificate for complimentary laser skin treatments for every four paramedical treatments she receives. “Wow! What a great deal,” Mary thinks, and quickly schedules four more appointments to take advantage of the complimentary laser skin treatment.
No harm here, right? Wrong. Promotions like this that encourage plan members to unnecessarily use their benefits to obtain a gift or incentive lead to people abusing their plans.
Won’t notice
To those who promote and perpetrate these kinds of scams, this is all harmless. They believe that everyone does it. Your employer budgeted for you to use a certain amount in benefits, so what does it matter if some of what you claim isn’t 100 percent legitimate? You’re just getting back what you’re owed. Or people will think to themselves that these are huge insurance companies – they won’t notice unnecessary treatments and extra costs.
But these justifications overlook what’s really going on – which is benefits fraud.
Fraud costs Mary’s employer more by driving up claims costs, which could lead that employer to limit or cut benefits. What’s more, Mary could end up losing her plan or her job. The clinic may also face consequences such as being delisted by an insurer or having a complaint filed with their professional association or college.
Regardless of how it gets rationalized, benefits fraud is a real crime with real consequences. You’ve seen the media reports. Every year in Canada, employees are fired, criminally charged, or face prison time for claiming things they shouldn’t from their company benefits plan. Practitioners lose their ability to bill insurers, are criminally charged, or lose their licence to practice.
On top of that, health benefits fraud and abuse cost employers and insurers millions of dollars each year. And these costs add up, putting real pressure on employers to ask whether they can continue to provide drug, dental, and supplementary health coverage to their employees. The consequences are serious and are not worth the risk.
To avoid detection, fraudsters are continually evolving their practices. One way is to spread fraudulent claims across many benefit plans and insurers. And while it may only be a very small number of providers defrauding health benefit plans, the impact on plan sustainability can be far-reaching.
All life and health insurers take anti-fraud management seriously. Each year individual companies make significant investments in technology, skilled staff, and education to prevent benefits fraud. But now these companies that otherwise compete against each other in the marketplace are working together on industry-led strategies to leverage each other’s knowledge, expertise, and resources to reduce the time it takes to act on providers who are exploiting workplace health benefit plans.
Joint investigations
Working through the Canadian Life and Health Insurance Association (CLHIA), insurers are collaborating on joint investigations into providers suspected of benefits fraud. Through these efforts, insurers are now better equipped to detect, prevent, and investigate those engaged in these schemes.
This new approach started with data pooling. Announced last year, insurers are now pooling claims data and using advanced artificial intelligence (AI) to identify potential fraud. This is giving insurers an edge in connecting the dots across a huge pool of anonymized claims data to identify patterns that can lead to additional fraud investigations.
Privacy concerns are taken very seriously, and insurers have taken steps to ensure that confidential information remains private. To protect the privacy of individual claimants, claims data provided to the system is entirely anonymized and encrypted. Only publicly available information about health providers is included in the system. These practices meet the standards of relevant provincial and federal privacy legislation.
When the AI finds a suspicious pattern, an alert is generated that allows affected insurers to review the information on a case-by-case basis. At this point, if more than one insurer decides that the alert merits a further look, they can reach out and work together on a joint investigation, which is administered by the CLHIA.
Actions following an investigation can include insurers choosing no longer to accept claims from a particular provider or clinic; informing plan sponsors that their plans may be subject to fraud or abuse; or making a referral to professional colleges, associations, or law enforcement.
Going after provider fraud is just one part of what CLHIA and our member insurers are doing. We’re also expanding awareness of benefits fraud and abuse among the public as well as among legitimate healthcare providers.
Educate Canadians
The CLHIA’s Fraud=Fraud website at www.fraudisfraud.ca educates Canadians about benefits fraud so they can recognize it, refuse it, and report it. Education plays a key role in preventing fraud by helping plan members and others to understand how benefit fraud affects them.
The information on the site also helps educate healthcare providers on how they can protect their patients and their practices from fraud. The site has tools and quizzes to test their knowledge about benefits plan fraud and its consequences.
All the measures insurers are taking together, from data pooling and joint investigations through to public and provider education, are meant to address misperceptions and misunderstandings as well as deliberate fraud. This allows providers, plan sponsors, and claimants to make the right decisions to keep workplace benefits sustainable for the 26 million Canadians who count on them.
Tackling benefits fraud today takes a coordinated approach. It takes providers who know and promote the proper use of health benefits in their practices. It takes insurers sharing information. And it takes public awareness so that individuals who suspect benefits fraud in their workplace can recognize and report it.
Joanne Bradley is vice-president, anti-fraud, Canadian Life and Health Insurance Association (CLHIA).
For more information about the work the CLHIA and its member insurers are doing to tackle benefits fraud, or to report suspected benefits fraud in the workplace, visit www.fraudisfraud.ca.
