Employers are experiencing a growing problem which affects their company bottom lines – an increase in Benefits Fraud. It is a form of theft from a company, and it can occur from a number of sources: employees, providers, sponsors, and external sources.
According to the Canadian Health Care Anti-Fraud Association, fraudulent claims cost the industry $1.2 billion to $6 billion every year. Many people see it as a victimless crime because it only hurts huge insurance giants. However, that is not an accurate perception. Fraud results in benefits plans raising their premiums for employers and employees. Small to mid-size companies are impacted more than large companies. Fraud can even occur unintentionally by employees, such as when an employee asks a provider to split up receipts for a service into smaller ones to get around per-visit maximums. Dental offices might provide discounts to those who don’t have plans but charge full price to those that do and regularly utilize the new patient exam, even if the member has been a patient for years.
So, what can employers do to curb the fraud?
Here are 4 tips to help employers prevent benefits fraud.
- Train your staff to watch claims closely
Does your company have a well-defined claims adjudication process? Are definitions of services clear and precise? (i.e., can support hose qualify as a legitimate podiatry claim?) Are the limits for certain products or services well-considered or are they in need of a review
2. Always ask “Why?”
Do the adjudicators of your plan know how to spot and pursue fraudulent claims? Do they question every claim until there is a logical and clear answer? Also, your benefits managers should be asking the bigger “Why?” If your overall claims are in line with your budgeting, but those claims are only being utilized by five to 10 per cent of your employees, is this a good return on your investment?
Sometimes claims surge for a particular employee and upon research, managers might learn of a child or spouse with special needs, or the onset of a grave disease or rare illness. These individual situations need to be considered carefully and with compassion. Other times, employees will make claims that are not related to their own health, with pharmaceuticals for example. These need to be traced and addressed to prevent further fraud.
3. Educate Employees on how Fraud Affects Everyone
Do your employees understand that the more fraud that occurs by individuals, the higher the premiums will be for everyone, and that another consequence might be the reduction of certain benefits to compensate for the losses due to fraud. Employees need to understand that their actions will have consequences, possibly (and hopefully) for them personally, but also for all of their fellow employees and the entire company. As one benefits manager put it, “When you commit fraud, you are really reaching into the pocket of the person next to you. They end up paying higher premiums or losing benefits because the employer can no longer support the claiming patterns”.
Employees should also know that health care service providers might be engaging in fraud and they could be willing or unwilling accomplices. What if your dentist says he/she will list your cosmetic porcelain veneers as a restorative treatment rather than a cosmetic one so you can claim it? Teach employees to spot and understand exactly what their service provider is going to claim to prevent them from over-billing the insurance provider.
Teach employees to stay in charge of their charges! For example, do your employees know that a unit of dental scaling is 15 minutes? Are they charged for 4 units when they did not spend an hour getting their teeth cleaned? Do your employees know they can tell the dentist that their plan only covers 2 units per visit?
These are just a few simple ways to help get your employees on board with fighting fraud and not becoming accomplices in it.
4. Be creative with plan design.
Consider having combined family maximums, and benefits for just the employee. If your employees are on their feet all day, think about orthotics coverage for the employee but not the whole family. Two other tools that might help are implementing co-payments and deductibles. Employees will immediately be more careful about costs if either of these are in place. Finally, having a Health Care Spending Account or Personal Spending Account can also deter fraud. These accounts can be set up to show a deduction from the total amount with each claim, so employees make the best possible choices for using those funds.
While it might be impossible to eliminate fraud all together, the problem needs to be addressed not just by management but also to some extent by employees. Employees should understand the problem, the consequences, and the value for them to be on the alert for fraud and avoid it themselves. Managers can use tools at their disposal to shape plans with fraud in mind, without reducing benefits.
At Health Risk Services, we take fraud very seriously, which is why each and every claim is adjudicated prior to being paid! There is no automatic approval here – we are the guardians of the employer vault! We know how to recognize and pursue a wide variety of fraudulent activities.
We would like you to know more about how Health Risk Services can assist you with a 2021 plan to identify and address fraudulent benefits claims, so please schedule a Complimentary Consultation with us.
At Health Risk Services we will Empathize, Educate, and Empower you and your team in 2021!
To schedule your Complimentary Consultation with Health Risk Services, please call 403-236-9430 OR email: [email protected]