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Plan Sponsors |
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What Plan Sponsors Need to Know
As a benefits plan sponsor, it is important that you meet the benefit needs of your employees while managing the cost of those benefits. Although the incidence of health benefits fraud may be relatively low, the potential financial cost can be quite damaging.
In a recent case in Canada (2008), a single employee in a medium- to large-sized firm was at the centre of an important health fraud scam that involved numerous employees and cost the employer and plan administrator approximately half a million dollars. Over a number of years, the ring leader submitted a tidal wave of false benefits claims on behalf of herself and the other participants. The plan administrator uncovered the fraud by noticing irregularities in some of the service receipts submitted for payment.
In cases like this, it is often discovered in the course of the investigation that some of the participants were truthfully unaware of the impropriety of their conduct because of sheer ignorance or manipulation by others. Therefore, it is vital that plan sponsors engage their employees as a crucial component of their overall risk management strategy. The best thing any plan sponsor can do to mitigate health benefit fraud and abuse is to take active steps to prevent it from occurring in the first place.
The following is a list of some of the things your firm can do internally and with the help of your benefits administrator to reduce the risk of health benefits fraud within your organization.
Educating Your Employees
- Educating all your plan participants is the best defence against health care fraud. Involve your members in the management of their health plan dollars. Ensure that all benefit recipients receive and are familiar with a description of the benefits policy. This will help to avoid confusion about the scope of coverage and reduce the likelihood of accidental misuse.
- Encourage plan members to verify the accuracy of all explanation of benefits (EOBs) for any health treatments they receive. Instruct plan members to immediately report any discrepancies between the service or products they received and what was billed for.
Whistleblowing
- Equip your plan members with a way to report any fraud they encounter amongst their colleagues. Most insurance companies utilize some type of anonymous tip-reporting mechanism, usually by phone or online. Make the presence of these services known and encourage members to use them.
Shifting the Responsibility
- Introduce co-pays and deductibles to induce plan members to take more responsibility for the claims submitted on their behalf.
- Many plan sponsors have taken to capping benefits in certain claims areas. A rise in orthotics and medical stockings utilization has prompted this type of reaction in order to control costs more effectively over a given period of time. As a general rule, most benefit managers recommend against unlimited benefits of any kind since they are costly and very difficult to retract once given.
Selecting a Plan Administrator
- Pick a plan administrator/benefits manager that adheres to the latest standards and best practices in fraud prevention. This can be best assessed by inquiring about their anti-fraud policies and the kinds of resources they have dedicated to fraud containment and risk management. The firm you choose should also be held accountable for maintaining these standards and improving them through continuous upgrades to critical systems and staff.
Prevention is the Name of the Game
- Plan sponsors should do their utmost to create an anti-fraud culture within their organization. Have clear policies and guidelines on appropriate utilization of benefits and take steps to raise employee awareness about the cost of the problem. Explain to plan members how fraud can negatively affect them, their benefits, and possibly their employment status.
- If you have concerns about your benefit plan design and/or risk exposure to health care fraud, contact your benefits administrator. If you have any questions above the information above, please do not hesitate to contact the CHCAA by clicking here.