Each year group benefit plans lose large sums of money to benefits fraud which ultimately drives up plan costs. What employers may not be aware of is the extent to which fraudulent conduct on the part of patients and healthcare providers contribute to escalating premium levels.
Fraud is obvious only after it is discovered. As a result, statistics are best guesses about the degree of fraud that occurs. The Canadian Health Care Anti-Fraud Association estimates that 2% to 10% of all healthcare dollars spent in North America are spent fraudulently. With healthcare spending in Canada estimated to have surpassed $160 billion in 2007, this suggests that the amount lost to healthcare related fraud falls between $3.2 billion and $16 billion dollars annually. This is a staggering sum and one that is passed on to employers and employees in the form of higher benefit premiums.
Fraud committed by employees includes:
- exaggerating illness or injury to collect additional disability benefits
- obtaining multiple drug prescriptions from various physicians
- keeping ineligible dependents insured for benefits and failure to advise insurance carriers of co-ordination of benefits between spouses
- submitting false claims
Fraud committed by healthcare providers includes:
- billing for services not medically necessary
- charging for a more expensive service than was provided
- billing for services the provider is not qualified to offer (i.e. physiotherapist charging for weight loss advice)
All insurance carriers have measures in place to assist with detecting and preventing fraud such as:
- limiting the purchase of medications to a 3 month supply
- requesting paramedical practitioners provide registration/licensing paperwork
- requiring employees to re-enroll their children as students every September
- auditing claims submitted online and limiting the dollar amount of claims being submitted online
- certain medications such as those for severe pain are automatically flagged by insurers once a claim arises to ensure no abuse by the employee or dependent
Below are several ways of assisting in preventing fraud:
- keep information private such as security numbers and passwords
- never sign a blank claim form
- for providers who submit claims directly to your insurance company, ask for a copy of the claim so you can verify the accuracy of the information
- if audited by the insurance company, submit the necessary original claims in a timely manner
If you have questions regarding claims fraud and your plan, please feel free to contact us.