Healthcare insurance fraud is commonplace in Canada but there are ways employers and insurance companies can halt the financial impact.
Perhaps the best way is through data analytics to see who the fraudulent ones are versus those who aren’t. It’s easy to commit, for instance the Toronto Transit Commission was involved in a healthcare fraud investigation for many years. Employees were accused of handing in inflated healthcare products and services receipts they allegedly never received.
Since the investigation began in 2014, more than 220 employees have quit, been fired or retired. The TTC planned to sue its insurance provider, the healthcare company and its proprietor due to the insurer not having appropriate fraud management controls in place.
According to a report from the Canadian Life and Health Insurance Association, two to 10 per cent of all healthcare funds are devoted to fraud: up to $20 billion each year in Canada.
A main reason for those high health insurance premiums is because of theft from the system. That is a substantial amount of money each month to fund fraud.
It’s Canada’s privacy laws that impede the insurance industry’s inability to police healthcare fraud. This is not the same case in the United States. Here in Canada, if you see a doctor and get a prescription, the insurance provider doesn’t see the details of your visit. This means companies can’t run data analytics to help determine if they’re committing fraud.
Why can’t doctors’ visits be linked to pharmacy claims? Because the medical services are billed through OHIP; the pharmacy claim goes through the medical insurer. There isn’t a way to be able to match them up.
While companies should be proactive and take close looks at their books and records, one way to handle it is for the government to examine the privacy laws around OHIP, and also let insurers share details about who’s received what from service providers, pharmacies, chiropractors and massage therapists – those who might be milking the system.
Investigators in the field refer to a “fraud triangle”, which refers to points of opportunity, pressure and rationalization. As costs go up, it can be a struggle, and some people can succumb to pressure if you suddenly have a big medical expense. Rationalization sets in when people begin to think that if everyone’s doing it, it’s OK.