Understanding and Preventing it.
Are you worried about the impact of fraud on your health benefits plan cost? We break down the landscape of health benefits fraud — what it is, the consequences of committing fraud, and how to possibly minimize it.
Health benefits fraud is more common than many realize and can have very negative impacts on everyone involved, including insurance companies, businesses, health providers, and employees. The Canadian Life & Health Insurance Industry (CLHIA) recently launched a campaign to raise the level of consumer education and awareness around health and dental benefits fraud so that together, we can stop this all too common form of crime.
What is Health Benefits Fraud?
Health benefits fraud occurs when an employee intentionally submits false or misleading information on their health or dental benefits claims, for financial gain. This could include things like:
· Using benefits to purchase non-prescription sunglasses, or regular shoes instead of orthotics.
· Letting a friend use your benefits
· Increasing the amount of your claim
· Claiming a treatment under a dependent’s benefit instead of your own
· Claiming prescription drugs on behalf of others
· Submitting a full claim to multiple insurers
· And more….
Unscrupulous service providers can also commit the fraud. In these cases, providers may be the ones submitting false claims or receipts in your name, billing for services or items you didn’t receive, charging higher rates because you’re insured, or recommending and providing services or products you don’t need in order to get the most financial gain from your benefits plan.
Who is Impacted by the Benefits Fraud, and how?
Employee benefits fraud has both direct and trickle-down effects on everyone involved in the delivery, payment and receipt of dental and health benefits.
Insurance Providers: Insurance providers have the most direct and immediate impact from the fraud as they pay out false health benefit claims. Paying out false claims drives up the cost of health insurance for everyone, since Insurance providers constantly adjust pricing based on overall cost of claims.
Business Owners / Employers: Since insurance providers adjust benefits plans based on usage, the costs of fraudulent claims will generally be passed on to employers and business owners. These added costs affect overall profitability, and could limit employers’ abilities to offer other perks or benefits, hire new staff, and more.
Employees: If employers have to make future adjustments to employee benefits plans, or recoup increased costs by cutting costs elsewhere, there could be many potential impacts on employees. In cases where employees co-pay for their health benefits insurance costs, they will directly bear the cost of increases due to fraudulent claims.
In addition, employees may be affected if they receive services from a de-listed health provider who has been de-listed by the insurance company for fraud. Insurance providers regularly update their list of providers – it’s a good idea to ensure your health provider is in good standing with your plan provider.
What Happens when the Fraud is Caught?
Employees who submit false or misleading information in their claims often believe their actions have minor consequences, but health benefits fraud is a crime.
Employees who are caught submitting fraudulent claims could face a host of dire consequences, from losing benefits coverage, to * firing, facing fines or jail time, and having a criminal record.
Health Service Providers who issue false receipts may be de-listed from Insurance carriers approved list of providers. In addition, they may face the same consequences as employees, including a criminal record, and facing fines or jail time.
How to Prevent Health Benefits Fraud.
Employers can help prevent benefits fraud by educating their staff and ensuring they know who to contact if they have questions. To help employees understand and avoid it, you’ll want to education them on the following:
· How to submit claims properly
· What is health benefits fraud?
· How to recognize signs of health benefits fraud by health providers
· Consequences of health benefits fraud
· How to report health benefits fraud
Working to prevent health benefits fraud is an important part of plan administration, and helps ensure long-term cost efficiency of your plan for your business, and your employees.
If you need support getting the right group benefits plan for your business, or educating your staff to get the most from their plan while staying on the right side of the law, we’re here to help. Check out our services, or contact us for a consultation.