On April 19th, 2010 the CBC did a story on Spa Fraud. The Canadian Health Care Anti-Fraud Association (CHCAA) would like to thank the CBC for shining the public spotlight on this unsavoury practice that goes on in some spa clinics. The CHCAA was happy to cooperate by answering questions that help to raise public awareness about health care fraud and the serious impact it has on Canadians and our health care system. We would like to provide additional information about the extent of the problem and the actions the insurance industry is taking to combat it.

A Quick Profile of Spa Fraud

The Players: The patient, the spa and the health care professional (eg. massage therapist, physiotherapist, chiropractor).

The Scheme: The players collude to defraud a health benefit plan by submitting what would appear to be legitimate receipts for services that were never delivered. There are three critical components to this scheme:

1. The spa provides false documentation for a service that would be covered under a health care plan such as massage therapy, naturopathy, osteopathy, etc. that was not provided.

2. A service provider has either intentionally or recklessly lent their signature and provider number as proof that the service was done by a legitimate practitioner.

3. The patient submits a false claim to their benefit plan and enjoys a free day at the spa on their employer or insurance company.

The Big Losers: Ultimately, the cost of these false claims is paid for by consumers through increased prices or by reduced costs in your workplace through reduced benefit coverage for you and your co-workers.

Companies budget a limited amount of money for extended health insurance provided to employees. These health benefits are meant for employees and their families who have a legitimate need for health insurance for things like prescription drugs, vision care and massage therapy. This money stolen by fraudsters can cause plan sponsors to reduce existing benefits or cancel them altogether, hurting other plan members who need them most.

If your employer chooses not to adjust the company benefit coverage, the additional money that an automobile or clothing manufacturer has to spend because of fraud against its benefit plan may be reflected in the price of the item you are buying.

The Consequences when you get caught

Fraud is considered a serious crime in the courts. The penalties, if you get caught committing this type of fraud, range from imprisonment to heavy fines and a strong chance you’ll lose your job. In addition, health care providers caught committing fraud may stand to lose their license to practice, which could represent a serious blow to their livelihood.

Stopping Fraud

The CBC was correct when they pointed out that this type of fraud is very difficult to detect, especially when there is collusion between the players. Nevertheless, each year the insurance industry successfully investigates and prosecutes numerous cases. Insurance companies spend millions of dollars to manage the risk fraud represents. Resources are invested in auditing claims, conducting investigations and legal fees to prosecute civil and criminal fraud cases. The CHCAA offers training and education on best practices for preventing, investigating and prosecuting health care fraud. We work with the public and other stakeholders to make them aware of the problem and the threat it represents.

The CHCAA and its members regularly collaborate with law enforcement and organizations that license health care professional, including the College of Massage Therapists of Ontario, to investigate fraud and bring the perpetrators to justice. We work within the boundaries of privacy laws and other legislation that, at times, restricts our ability to communicate and share important information about individuals and fraud cases.

Despite these efforts the CHCAA needs the public’s help to weed out the bad apples. We are reaching out to Canadians to strongly encourage them to come forward and report instances of health care fraud that they may be aware of.

We take every tip very seriously. Although the CHCAA does not have its own investigative function all tips are communicated to our members who actively pursue each lead.

The CHCAA recognizes that health care fraud is committed by a relatively small number of individuals, but the associated economic cost is large in comparison. We believe that with your help we can stop health care fraud in its tracks and safeguard the integrity of health care for all Canadians.

Fraud hurts everyone,. Recognize It. Report It. Stop It.