Medical insurance fraud widespread, as employees, providers rip off benefit plans


Employers and their insurance providers are reeling at the proliferation of fraud rings — groups of employees that work together to abuse and exploit benefit plans, with medical services providers as their eager accomplices.

« You’re sitting in the lunchroom when a co-worker comes in and says, ‘I’ve got $1,000 worth of massage receipts, $2,000 worth of physiotherapy receipts, submit them all, and we can share the money,' » explains Gary Askin, a former commander with the Waterloo, Ont., police force who now works as a fraud investigator with Sun Life.

Cash, cash cards, purses, designer sunglasses, coats, and iPads are examples of what people have been able to get with fraudulent health benefit claims.

« They’ll say there’s no need to worry about getting caught, because they know the provider, and if the insurance company calls them, they will validate the claim. »

Askin refers to fraud ring organizers as « recruiters » and says the schemes can grow quickly, as employees reap rewards and spread the word.

Former police commander Gary Askin now works with insurance giant Sun Life, investigating cases of benefits fraud. (John Lesavage/CBC News)

« They rationalize it by saying ‘you didn’t get a raise last year,’ or ‘don’t worry, it’s just the insurance company’s money.’ They make some very compelling and convincing arguments. »

Sun Life estimates that 85 per cent of its fraud losses involve collusion with a medical services provider.

Clinics that offer massage, physiotherapy, orthotics and compression stockings are most commonly used. Sun Life « delisted » a whopping 1,500 providers across Canada last year alone, after proving they had been involved in false claims. Claims from those clinics are no longer accepted.

« You’re stealing from your employer, » says Dave Jones, Sun Life’s head of group benefits. « You are stealing from the wallet of money, if you can think of it that way, that’s used to pay for your health care, and the health care of your family, and the health care of your friends and colleagues at work. »

The industry association has recently launched a public awareness campaign called « Fraud=Fraud, » to educate Canadians about the problem. The website features a link to a page of email addresses and phone numbers, where suspected cases can be reported to authorities.

An image from the CLHIA’s public education campaign. Many employees don’t realize that criminal charges as well as termination of employment can be among the consequences of benefits fraud. (CLHIA)

One case that made headlines in 2018: the Toronto Transit Commission fired 250 employees after discovering they were all involved in a scam related to orthotics. The service provider — who facilitated the entire escapade — has been sentenced to two years in a federal penitentiary plus three years on probation.

Meanwhile, a Toronto firefighter was sentenced to six months in jail for submitting $32,000 in forged receipts. A professor at York University appealed her firing after falsifying invoices for $8,000 worth of massage and physiotherapy, but lost.

How it’s done

A typical scam might involve compression stockings. The fraudulent provider is aware that a particular company’s benefit plan will cover four pairs in a year, at a cost of $220 each.

When an employee arrives with their prescription, the provider presents a new and enticing offer: pay for all four, submit the receipt and be reimbursed in full by the benefit plan — but receive just one pair of compression stockings and collect some « incentives » on the side.

Insurer Green Shield Canada sent an undercover investigator into one such meeting in an Ontario city last August to pose as an employee. She recorded the meeting with a hidden camera.

« I can give you the website, you can choose what kind of shoes, » the provider tells the investigator, who selects a pair of Ugg boots.

« Show it to your husband too, OK? » he adds, well aware that the plan will also cover a spouse’s medical needs as well.

Sun Life’s Dave Jones says the company’s fraud team includes close to 100 investigators, some of them former police officers, others are data scientists. (Ed Middleton/CBC News )

Green Shield’s Brent Allen says providers often encourage scam participants to max out on their plans’ provisions. He’s seen employees collect all manner of goods.

« We wouldn’t think it’s acceptable to steal from our employer outright, » he says.

« If you saw somebody walking out with an iPad that the employer had bought, you would be offended by that. Then why is it OK to go to a provider and get an iPad that that employer paid for? »

Life and death decisions

Allen attributes the fraud epidemic to greed.

« There’s a lot of money in our industry, » he says. « People are going to want to take pieces of it. »

In total, private insurers paid out $34 billion in health claims last year, according to the Canadian Life and Health Insurance Association (CLHIA). Estimates for the number of fraudulent claims range from two to 10 per cent, meaning between $600 million and $3.4 billion is being stolen annually.

Those costs can be paid indirectly by honest, innocent employees.

« There are life-saving drugs available under these plans that can cost hundreds of thousands of dollars, » Allen points out.

And employers can’t afford to be paying hundreds of thousands of dollars for claims that aren’t real when they have somebody truly in need. It’s forcing employers to make decisions about whether they cover expensive drugs that could be the difference between somebody living or dying, working or not working. »

Data and artificial intelligence

The CLHIA’s public awareness campaign includes advertising on Facebook, LinkedIn and Twitter. A professionally produced commercial shows an employee being escorted out of the office by security with a box of their belongings, while shocked co-workers stand and stare.

« You were appreciated and liked, soon to be rewarded with a promotion and raise. But you threw it all away, » intones a sombre voice-over. « So if you’re thinking about falsifying your health or dental claim, think again. »

But as schemes become more sophisticated, so do detection methods. Green Shield uses an artificial intelligence program to spot fraudulent claims. Sun Life has a team of almost 100 investigators, using special software to make connections between suspicious clinics and employees using them.

« These are resources I would’ve died for in policing, » says investigator Gary Askin. « We’ve got more data scientists working for Sun Life than any police service in the country, with the exception possibly of the Mounties. »

The industry association hopes its awareness campaign will generate a number of tips regarding cases of suspected fraud. The message they’re trying to send is clear: if you’re not prepared to do the time, don’t do the crime.


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B.C. First Nation eyes renegotiating benefit deal on Trans Mountain pipeline project


A British Columbia First Nation is looking to renegotiate its Trans Mountain expansion benefit agreements signed before Ottawa bought the pipeline, according to a band councillor.

Simpcw First Nation Coun. George Lampreau said the new round of consultations launched by Ottawa following August’s Federal Court of Appeal decision created a new process on the project.

Simpcw First Nation, about 80 kilometres north of Kamloops, B.C., was one of 43 First Nations that signed mutual benefit agreements (MBAs) with Kinder Morgan when it owned the 1,500-km Trans Mountain pipeline and was working to increase its capacity to 890,000 barrels of oil per day from 300,000.

« To us it’s a new process. They keep telling us, ‘Your MBAs are going to stand up,' » said Lampreau. « We don’t feel that way. So we are going to probably get into renegotiating. »

Lampreau said the band council still needs to develop its plan with the new consultation process and discuss it with community members.

The First Nation held a referendum to ensure it had community support to sign the initial MBA, said Lampreau.

« It’s a community process. We engage with them with on every major decision we make within our community, » he said.

Trans Mountain says it will honour MBAs

In an emailed statement, Trans Mountain media relations said it « will continue to honour all of our mutual benefit agreements as agreed to and are committed to our relationships with Indigenous communities and to completing the project successfully and with shared prosperity for those communities. »

Ottawa purchased the pipeline in May because the previous owner, Houston-based Kinder Morgan, was preparing to walk away from the $7.4 billion project which faced stiff opposition from First Nations and the British Columbia government.

An aerial view of the Trans Mountain marine terminal in Burnaby, B.C., in May. (Jonathan Hayward/The Canadian Press)

The expanded pipeline would pump bitumen mined in Alberta from its Sherwood Park terminal to tankers docking at an expanded Westridge Terminal in Burnaby, B.C.

The Federal Court of Appeal in August overturned the approval for the Trans Mountain pipeline expansion, partly on grounds Ottawa failed to properly consult and accommodate First Nations on the project.

Lampreau said Simpcw decided to sign onto the pipeline expansion to increase its influence over how the project unfolds.

« We would rather be involved in the process than sitting on the outside and have it pushed through, » he said. « At least our concerns are heard right at the front. »

Lampreau said the First Nation has developed an emergency response plan and is currently monitoring and maintaining the existing 50-year-old Trans Mountain pipeline.

‘We have been called sell-outs’

Lampreau said Simpcw has faced a lot of heat on its position from First Nations activists who oppose the pipeline. He said the band leadership has even faced threats over the issue.

« We have been called sell-outs; We have been called traitors, » said Lampreau.

Lampreau criticized the vocal position taken by Neskonlith Indian Band Chief Judy Wilson and the Union of B.C. Indian Chiefs (UBCIC) against the pipeline. He said some of the activists targeting his community are from Neskonlith, about 51 km west of Kamloops. 

Wilson is secretary-treasurer for the organization. Simpcw is also a member of UBCIC. ​Neskonlith and Simpcw are both part of the Secwepemc Nation.

Lampreau said the pipeline crosses within a few kilometres of Simpcw’s reserve boundaries and through about 400 kilometres of its territorial « division » within Secwepemc territorial lands.

« Even though the right is collective, we have our own right within our division and we protect that, » said Lampreau.

« Yet no one from the rest of the nation, including [Wilson] has ever come to us and asked us about what we are doing with the pipeline. »

‘The collective benefit isn’t there’

Wilson said Lampreau’s linking of activists to her community was an attempt to get a legal hook to place responsibility on her leadership.

Wilson said band councils control territory only up to their reserve boundaries and it’s the people of the nation who hold title to Secwepemc territory as a whole.

Neskonlith Indian Band Chief Judy Wilson speaks during an anti-Trans Mountain pipeline news conference on Thursday during the Assembly of First Nations annual December meeting in Ottawa. (Jorge Barrera/CBC)

« Title belongs the nation and it’s collective in nature, » said Wilson. « I think the ones who are trying to claim territory are buying into those colonial notions and the divide and conquer tactics of the government and industry. »

Wilson said a letter has been sent to Simpcw explaining her position.

Wilson said she understands why some First Nations have signed onto the Trans Mountain project, but said the promised economic benefits pale in comparison to the pipeline’s threat to the environment.

« The collective benefit isn’t there for the people and as leaders, that is what we are supposed to be looking at — the collective benefit of our people, the land and water, » she said. « And not be blinded by economic promises that are really false economic promises. » 

Neskonlith chief accuses Trudeau of sexism

Wilson confronted Prime Minister Justin Trudeau Tuesday over his government’s failure to obtain « consent » from First Nations on the pipeline project.

Neskonlith Chief Judy Wilson asks PM about consent on Trans Mountain pipeline 5:23

The exchanged occurred after the prime minister delivered a speech to the Assembly of First Nations during their annual December meeting in Ottawa.

In his response, Trudeau referred to Wilson by her first name, while using the title « chief » responding to the other male questioners. 

Wilson and UBCIC have demanded an apology from Trudeau over what she viewed as sexism.


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Vulnerable children don’t have access to Canada Child Benefit, says advocacy group


Thousands of Canada’s most vulnerable children don’t have access to hundreds of dollars a month in federal aid because of red tape, according to a non-profit organization.

The Elizabeth Fry Society, a charity that supports at-risk women, girls and children, recently launched a petition to ensure that children who need it most get the Canada Child Benefit. 

The Trudeau government introduced the program two years ago. Amounts are based on family income, but can reach up to $541 per child, per month. 

« [The Canada Child Benefit] is one of the best leaps forward we’ve made in this country in years in terms of supporting poor children, » said Shawn Bayes, executive director of Greater Vancouver’s Elizabeth Fry.

« But some of the bureaucracy around it does not enable families to be able to claim a benefit that they would be entitled to. »

Bayes says tens of thousands of low-income children across Canada don’t get the funding.

Driving the problem is at-risk children in informal relationships with a caregiver like a grandmother or other family member who is not the legal guardian.

Many of these informal caregivers are pensioners, on social assistance or on a low income, Bayes says.

The paperwork to sign up for the Canada Child Benefit is onerous for caregivers with limited education, she says, and the lack of legal status keeps them from having access to required documents like birth certificates. 

‘It’s all out of pocket’

Such is the case for Metro Vancouver resident Lola (whose last name has been withheld to protect the child in her care).

Two years ago Lola got a call from a social worker asking her if she could take in her niece. There was physical abuse and drug abuse at the niece’s home, the social worker told her.

It was only meant to be a temporary solution — but two years later Lola’s niece is still living with her, her partner and their two children. 

Lola says she has no additional support or funding for her niece to help with basic costs like food, school supplies, transportation, medication or clothes. 

Children with a precarious home life are often cared for informally by other family members, according to the Elizabeth Fry Society. (iStock)

« [The Canada Child Benefit] would make a huge difference. It would pay for all of the extras. Raising my own kids and another child, it’s not cheap, » she said.

« Forget about any sort of recreation or social activities because it’s all out of pocket. »

Lola said she could probably get legal caregiver status, but she can’t afford a lawyer or the time off work to deal with the matter in court. 

Now that she’s caring for her niece, Lola says she has heard of many families and children in situations far worse than hers. 

« There’s a lot of family members out there that are committed to caring for little ones, but finances can be a barrier for them, » she said. « And that might mean the difference between them being able to care for their relatives or not. »

‘There is always more work to do’

To help solve the problem, the Elizabeth Fry Society wants vulnerable children and their caregivers to have other means to provide proof of guardianship.

For example, a social service organization could confirm the relationship and the child’s circumstances to trigger the benefits, Bayes said, simplifying the application process. 

The organization’s petition has gathered 5,000 signatures so far, which NDP MP Peter Julian, who represents New Westminster-Burnaby, presented in the House of Commons last month. It’s now available online.

In a written statement, the Ministry of Families, Children and Social Development said the Canada Child Benefit has helped lift 300,000 children out of poverty.

« As per usual process, our government will be tabling our response to this petition, » the ministry secretary said.

« We have made important investments that represent a positive step forward, but we know there is always more work to do. »


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