Can Benefits Plan Design Reduce Fraud?

Mike Ignatz has managed Business Development at The Benefits Trust since 2005. His drive and focus has helped The Benefits Trust provide better benefits plans to small and mid-sized businesses throughout Canada.

Can Benefits Plan Design Reduce Fraud?

Benefits Fraud Prevention
There is a sign at the gas station across the street from our office that states “fuel theft affects us all.” Healthcare claim fraud is no different – as the ultimate cost of fraudulent claiming is higher premiums or a reduction in coverage for everyone.

Fraud, unfortunately, is a constant concern in the employee benefits industry. One way to reduce it is by helping plan members realize they have a tangible financial stake in how they use benefits. This can be achieved through smart plan design – a vital component in the prevention of fraudulent claims.

One method to limit exposure to risk is by setting combined maximums, such as overall individual and family maximums on paramedical claims. Unscrupulous service providers use a number of schemes in an effort to defraud benefits providers. Setting overall maximums mitigates the damage that these kinds of fraudulent claims can do to your plan.

Health Care Spending Accounts (HSAs) are another plan design option that can eliminate a lot of the motivation for fraud. The overall dollar amount is limited, so fraudulent claims take away from funds that could be used for other, legitimate expenses. HSA Explanations of Benefits show the account balance after every claim. If a member is knowingly defrauding their plan, they can see that they are depleting a finite amount. HSAs encourage members to be more prudent with their health care choices. They can also be used as a partial alternative to core coverage. Rather than placing combined maximums on certain core portions of their plans, many employers are simply removing those portions of their plans and substituting a Health Care Spending Account. The employers reduce their risk while the employees receive more flexibility in their coverage.

Our approach to preventing benefits fraud

We always strive to balance our industry-leading claims turnaround time with protecting the financial integrity of our clients’ benefits plans.

Our first line of defence against benefits fraud is helping you build a properly designed benefits plan. Once claims are submitted, real live people assess your employee claims, allowing for trained evaluation by attentive adjudicators. Auditing is done on an ongoing basis as patterns emerge. Where necessary, we contact the member or the service provider by phone for clarification to expedite the process. We are continuously fostering relationships with the colleges and associations responsible for regulating the practitioners. These relationships allow us to resolve service provider issues in a timely fashion.

We are also active members of The Canadian Healthcare Anti-Fraud Association (CHCAA – http://www.chcaa.org). Every month we join industry peers to discuss better ways to combat benefits fraud. This cooperation extends beyond the meetings, allowing us to ensure that – among other things – there is no “double dipping” going on (wherein a member or service provider claims with multiple carriers, allowing them to be reimbursed in excess of 100%).

To request more information about our approach to preventing benefits fraud, contact us today.

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