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Benefits Fraud

The Canadian Health Care Anti-fraud Association estimates that 2% to 10% of total health care spending in Canada results from fraud.


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Benefits claim fraud is a significant problem in Canada. If you have a group benefits plan, the odds are staggering that your group benefits plan has been affected by fraud.  According to Benefits Canada 95% of Canadian plans have been victimized by fraudulent claims.

But why should you care?

1.  Cost – The first and most important reason is the cost. Fraud makes the cost of providing group benefits more expensive, and can quite simply lead to higher premiums.

2. Employment – If your employees submit a fraudulent claim on their own or by working with a service provider, you could have a much more serious internal issue to resolve. Dishonesty in claim submission may lead to a number of penalized actions that could vastly impact the structure of an organization.

3. Plan Utilization – Fraud has an adverse affect on the utilization of your plan and can prevent members who legitimately need care from receiving the quality of health benefits that they deserve. This is quite often manifested through reduced coverage due to inflated premium rates

Benefits Fraud can be generally accomplished in one of two ways. The first is by an employee who may be exaggerating an illness or injury to collect additional disability benefits, submitting false claims or keeping ineligible dependents insured. Fraud can also be committed by the health care provider billing for services that are not medically necessary or charging for a more expensive service than was provided. In recent years, it has become evident that there is also a larger systemic issue involving health care providers who partner with plan subscribers to commit fraud. Below, we have provided some tips which may help you inhibit this type of activity within your organization.

Five Anti-Fraud Tips:

1. Prevention – One of the best ways to mitigate fraud is to prevent it in the first place. Ensure that you have strategies in place, in conjunction with your benefits administrator/payer, to help prevent fraud from occurring.

2. Deterrence – Similar to prevention, anything that can be done to deter fraudsters from acting is a good thing. The penalties involved should be made clear and if a situation does occur involving fraud it may be in your company’s best interest to be transparent about the consequences.

3. Detection – Make sure you are vigilant about identifying fraud patterns, and look for red flags in various areas. Your benefits administrator/insurer is usually a good source for details in this area.

4. Investigation – Support the investigations launched by your benefits administrator/insurer. And don’t shy away from playing an active role when the tips come from staff.

5. Communication – Some fraud may simply result from a lack of knowledge about what fraudulent activity entails. It is imperative that you speak with your employees and clearly define what may be considered fraudulent behavior.

If you would like to discuss the contents of this email, or any other matter further, please reach out to your Silverberg team who would be pleased to provide you with additional assistance.

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