Identifying group benefits fraud… and stopping it before it happens

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Fraud is an increasing concern in the realm of group benefits, as it threatens the sustainability of group plans. Managing fraud has become a critical activity in containing plan costs, and insurers continue to make considerable investments in teams and technologies that detect fraud within their plans.

While it is important to detect existing fraud, it is also important to be proactive by implementing strategies that help to prevent fraud.

One key strategy for fraud prevention is deterrence. By definition, deterrence is the act of instilling doubt or fear of consequences in someone to discourage them from committing an offence. In group benefits fraud, it’s necessary to change the behaviour of employees and service providers for the better.

Insurance companies invest a considerable amount of time and resources in demonstrating to plan sponsors, plan members and health care service providers that they will take significant measures to reduce and even prevent fraud. Here’s how:

Claim audits. Whether random or targeted, insurers should seek to verify that services/supplies were rendered.

Education. Through a wide range of mediums, it is important to educate plan members and plan sponsors about identifying, monitoring, disrupting, and preventing fraud.

Health provider & facility fraud detection. Intelligence-based fraud strategies can help detect and monitor provider/facility fraud schemes, including predictive modelling and social network analysis.

What advisors can do
Advisors should initiate conversations with their clients about benefits fraud. They can also provide support in the following areas:

  • Check to ensure clients have appropriate coverage limits and benefits maximums.
  • Help clients select a plan administrator that adheres to the latest standards and best practices in fraud prevention.
  • Ensure clients understand the insurance provider’s anti-fraud strategy in relation to their benefits plan.
  • Share new information and emerging schemes that could affect benefits plans.
  • Foster collaboration and partnerships.

What we can do as an industry
Plan sponsors. Employers (plan sponsors) should ensure that internal guidelines or policies such as their code of business conduct addresses fraud and the consequences of this behaviour. Employers should make it clear that fraud against the benefits plan may lead to termination, a criminal record and put future employment opportunities, even with another employer, at risk.

Insurers. Each insurer has the responsibility to investigate fraud, whether the plan member is acting alone or colluding with healthcare practitioners. Without breaching privacy laws, insurers need to find ways to work together to identify fraud at higher detection rates so these schemes are no longer attractive.

Associations and regulated bodies. Regulators play a role in ensuring that service providers are adequately educated, have robust processes and are meeting approved billing practices. When the province does not regulate service providers, associations can set and monitor reasonable minimum requirements.

It is important to ensure that all parties participating in a fraud scheme know and fear the consequences of their conduct. We must all work together, including employers and their employees, service providers and their associations, law enforcement and the entire insurance industry to deter group benefits fraud.

To learn more about group benefits fraud, read Sun Life’s Bright Paper “Group benefits fraud: a leading edge perspective”.

This content is brought to you by Sun Life Financial.
Group Benefits are provided by Sun Life Assurance Company of Canada, a member of the Sun Life Financial group of companies.

Transcontinental Media G.P.