The Canadian Life and Health Insurance Association will now be working with participating insurers to collaborate on joint investigations into suspected benefits fraud schemes.
This initiative builds on last year’s launch of a CLHIA-supported program that uses advanced artificial intelligence to identify fraudulent activity across a vast industry pool of claims data.
“We’ve been working on getting the industry together to combat fraud claims for [a few] years now,” says Stephen Frank, president and chief executive officer of the CLHIA. “We know the sophisticated fraudsters are now at a point where they can spread their activities amongst the industry. We have to bring companies together in order to get the big picture . . . and make the process faster and more cost-effective.”
He advises benefits plan sponsors to keep an eye out for any unusual claim patterns, such as the number of claims spiking at certain times during the month. The data the CLHIA collects allows employers to spot anything suspicious, allowing them to identify what the CLHIA describes as ‘the impossible day.’
“Let’s say a provider billed four separate hours across seven different insurance companies in one day. Each company says, ‘OK, that looks reasonable,’ but when you add it all together, that’s more hours than there are in a day. And because the provider targeted seven companies, instead of doing seven different investigations, we would all work together.”
It’s estimated that employers and insurers lose millions of dollars to benefits fraud each year, which places the sustainability of benefits plans at risk. According to the CLHIA, insurers paid out nearly $41 billion in supplementary health claims in 2021.
“We want Canadians to understand that claims fraud is not a victimless crime,” says Frank. “In the end, it’s not the insurance company who loses, it’s the employer. So we’re trying to raise awareness . . . and we want to create a really strong deterrent. We want to identify it early and create a faster cycle and also make it a harder industry to take advantage of.”