Benefits fraud is often viewed as a victimless crime, one that affects large insurance companies rather than individuals. However, this is not the case when you consider that an increase in benefit plan claims will result in an increase in your benefit rates. Also, if the claims usage is causing premium rates to increase, an employer may look at limiting or reducing the paramedical coverage (i.e., chiropractor, massage therapy, acupuncture, physiotherapy etc.) to help with cost containment.
Benefits fraud can be as simple as a plan member submitting a claim for a massage they did not receive or increasing the dollar amount of the massage. It can also be a complex network involving plan members and service providers.
In one recent case a plan member’s massage therapy claim was randomly selected for an audit. When the insurance company examined the claim they discovered the amount on the receipt had been altered. When they inquired further it was determined that the service was never provided. The insurance company then decided to review the member’s previous 14 massage therapy claims and discovered that they were false as well. Subsequently the plan member had to reimburse the insurance company and was fired from her job.
In another case study, a number of employees from a company were involved in a multimillion-dollar benefits fraud scheme. The employees were going to an orthotics and medical equipment provider who would issue receipts for inflated or non-existent claims. The employees would submit their fraudulent receipts to the insurance company and then share the proceeds of the benefits payout with the owner of the store. In the end, police charged the store owner and 2 staff members with fraud and several employees from the company were fired.
According to the Canadian Life and Health Insurance Association, approximately 2% to 10% of all healthcare dollars are lost to fraud. Below are some tips on what you can do to help minimize the risk of benefit fraud.
As a Plan Member
- Keep invoices and receipts from healthcare providers.
- Report any discrepancies that appear on benefit statements.
- Do not sign blank insurance forms or provide blanket authorization to bill for services as these can be used to submit fraudulent claims.
- Report any service providers who try to persuade you to misuse your benefits plan.
As an Employer
- Have clear policies and procedures on appropriate benefits usage.
- Educate employees on benefit fraud and how it affects their plan.
- Provide employees with your insurance provider’s confidential email or phone number they can use to report suspected fraud.
- Let employees know how fraud can result in termination, criminal charges and/or fines.
And as always, your PEO Canada Benefits Administrator will be more than happy to answer any questions you might have!
Renee Buchwald / Benefits Specialist / PEO Canada