With benefits fraud a growing issue for plan sponsors, the recent spate of fraudulent activities at large organizations has prompted the question of who’s responsible for identifying benefits fraud in the first place. Is it insurers, plan sponsors or plan members?
Mark Russell, director of investigative services at the Toronto Transit Commission:
Five years ago, if I’d been asked this question, my immediate response would have been, “The insurance companies, of course.” As a result of overseeing a highly publicized, multi-million-dollar benefits fraud investigation involving hundreds of my organization’s employees, that stance has softened. Somewhat.
After all, the insurance companies are the gatekeepers of the data that’s provided with each and every claim submitted by plan members. They receive, hold and protect this private information, as they’re required to do. No other stakeholder has access to this data except in extenuating circumstances. Plan sponsors pay insurance companies to administer health benefits claims, and an integral role of that administration includes, or should include, the detection of benefits fraud and abuse. With advances in data analytics and artificial intelligence, this is more manageable now than ever before.
Why has my opinion softened? I’ve come to understand that the detection of benefits fraud is a complex issue that calls for more than simplistic solutions. While insurers shouldn’t be allowed to shirk this responsibility, plan sponsors and members play a significant role as well. Plan sponsors must educate their members about what benefits fraud looks like, and plan members must be incentivized to speak up when they encounter it. They must also be provided with the means to do so.
The investigation that introduced me to the world of large-scale benefits fraud started when an employee used an internal whistleblower hotline and revealed the scheme. Unfortunately, this tip happened after hundreds of employees engaged with an unscrupulous vendor for many years.
I’m far from being an expert in the field of benefits fraud. I have one large case under my belt, as well as a few smaller ones. As a result, I was a bit wary of providing an opinion that was perhaps misinformed. But I was recently reassured following a case study I presented of our investigation to a small group of corporate and insurance investigators, labour relations lawyers and benefits administrators. After the presentation, I asked the group for their opinions about who’s responsible for detecting benefits fraud. I was encouraged when an investigator from one of the large insurance carriers sheepishly acknowledged their responsibility — for the very reasons I’ve articulated.
Shannon DeLenardo, director of anti-fraud and electronic claims at the Canadian Life and Health Insurance Association:
Health-care benefits fraud is a serious issue for insurers, employers and other plan sponsors. It’s understood that insurers have made, and continue to make, significant investments in technology, skilled resources and awareness initiatives with plan sponsors to mitigate benefits fraud and abuse within their businesses. Across all industry stakeholders, it’s recognized that this can’t be done alone and that we must work together.
When it comes to benefits fraud, the CLHIA’s role is to facilitate discussion among our members, develop consensus on areas of importance, advocate for change with government and others and lead industry initiatives related to benefits fraud.
To support the understanding that fighting fraud is a shared responsibility, the CLHIA works to develop and strengthen strategic partnerships with law enforcement and health-care and dental providers, as well as professional colleges and associations locally, nationally and internationally.
Insurers, employers, other plan sponsors and employees, through vigilance, all have a role to play in fighting benefits fraud. The best way to mitigate it is to prevent it from happening in the first place. One way this is being achieved is through education and communication.
Last year, the CLHIA and its member companies launched a national consumer education campaign to combat health and dental benefits fraud called Fraud=Fraud. The campaign’s primary goals are to help Canadians recognize fraud, understand how to avoid becoming involved in fraudulent activities and increase awareness that fraud is a real crime with real consequences.
The industry is increasingly seeing evidence of organized crime or unscrupulous service providers getting involved and reassuring plan members that what they’re doing is normal or that they’re entitled to the money. An increased trend in these schemes can have a huge negative impact and are resulting in companies having to lay off large numbers of employees.
That’s why we believe a campaign like this is timely and necessary. The CLHIA will continue to focus on benefits fraud over the next few years, with the ultimate goal of reducing occurrences through better awareness and education. The CLHIA and our member companies take this issue very seriously.