The Canadian Life and Health Insurance Association (CLHIA) announced an initiative March 1, significant for member life and health insurers working on the problem of benefits fraud.
Insurers reportedly paid out nearly $41-billion in supplementary health claims in 2021 and nearly $27-billion in 2020. “It is estimated that employers and insurers lose millions of dollars each year to benefits fraud,” they state. In conversation with the Insurance Portal, CLHIA representatives point out that even one per cent of $41-billion is hundreds of millions of dollars.
The new initiative will see life and health insurers conducting investigations jointly into potential benefits fraud schemes. Insurers who see suspected fraud in their own data, or through a substantiated tip, or through the CLHIA’s own data pooling initiatives, may request to begin a joint investigation. Other insurers signed onto the initiatives may then request to join the investigation.
The initiative builds on the 2022 launch of the CLHIA-supported program which uses advanced artificial intelligence to identify fraud patterns across an industry pool of anonymized claims data – an initiative they say will expand in scope as more industry data is included.
Following the completion of a joint investigation conducted under the most recently announced initiative, the CLHIA says impacted insurers will review next steps on a case-by-case basis. Actions can include insurers no longer accepting claims from a provider or clinic, working with plan sponsors directly and referring the matter to professional bodies and law enforcement.
“The industry continues to make significant investments in technology, skilled staff and education programs to mitigate fraud,” the association states in its announcement about the initiative. “Participating insurers will collaborate on joint investigations into suspected benefits fraud schemes that impact multiple insurers.” The CLHIA’s representatives also add that the association plans to hire a full-time administrator responsible for overseeing and coordinating the initiative going forward.