CLHIA Update on Health Benefits Fraud and Abuse ACFE Edmonton Conference March 7, 2017

Agenda CLHIA/Industry overview CLHIA role in healthcare anti-fraud Fraud Prevention month The cost of benefits fraud The “journey” Trends Tips for preventing benefits fraud

Overview of CLHIA The CLHIA is a voluntary association representing 99 percent of Canada's life and health insurance business Approx 24 m Canadians covered through Extended Health Care (EHC) private plans

CLHIA Objectives To build consensus among members on issues and concerns of importance to the industry. To promote a legislative and regulatory environment favourable to the business of members. To foster sound and equitable principles in the conduct of the business of its members. To inform and educate members about domestic developments and, where warranted, international developments of importance to them. To preserve and advance the industry's reputation. To promote, on behalf of its members, public policies that contribute to the betterment of the Canadian economy and society. To deliver maximum value for money to its members.

Health insurance

Key stakeholder in healthcare system Private health insurance accounts for roughly 13% of total health care spending (16% if we include income replacement costs). ALBERTA 2015 Total Direct Health Care Spending * Government (excl. Capex, Public Health, Admin, etc) ($17.6 B) Hos ($9.4 B) Physic ($4.6 B) Drugs ($1.4 B) Othe ($2.2 B) Private Supplementary Health ($3.2 B) HospitAccom ($205 M) Visio Care ($109 M) Trav ($153 M) Para ($342 M) Dent Care ($1.3 B) Drugs ($1.1 B) Income Replace' ($754 M) STD ($131 M) LTD ($623 M) Employers balance all of their benefits to attract and retain employees, as well as to ensure a healthy and productive workforce Source: CIHI, CLHIA *Includes Household (out-of-pocket) expenses of $3.2 B 6 6

Why do employers offer benefits? Tax effective form of total compensation Support employee health to reduce absence/injury and improve productivity For some employers there are requirements in collective agreements Driver of employee satisfaction Attraction and retention of employees 7

Group Benefit Plan considerations Offering benefits is voluntary for employers Private plans are supplemental to public plans Rising employee benefit costs are creating concerns regarding the sustainability of plans Employers seeking more aggressive cost management Technology is driving change Fraud and abuse contributes to cost concerns Medically necessary services or supplies

The cost of benefits fraud Estimated that 2-10% of healthcare $ are lost to fraud Potential impacts: higher costs for everyone may impact sustainability of benefit plans may create a need for plan design changes

CLHIA Role in Healthcare Anti-Fraud Overall accountability for industry initiatives to assist in mitigating benefits fraud and abuse Strategic Partnerships: Global Law enforcement, public plans, etc Health/Dental Colleges and Associations Cross-industry collaboration

Tip-line Provides ability to send a tip to a specific insurer Provides ability to send a tip to all insurers Emails are sent directly from senders computer to insurers “It ain't what you don't know that gets you into trouble. It's what you know for sure that just ain't so.” Mark Twain

The “Journey” Information sharing Relationships with stakeholders Unregulated professions Industry initiatives CLHIA Claims and Anti-Fraud Conference

Fraud Prevention Month (FPM)

FPM: CLHIA Participation Member of Fraud Prevention Forum (FPF) Second year for CLHIA participation in FPM events CLHIA planned activities

Sharing the message…

Trends Sophistication in schemes- highly organized Occurs at all levels, ie plan member, plan sponsor, provider, supplier, etc Cross-industry schemes Identity theft Billing for services not rendered Collusion between plan member and provider Fake facilities

Prevention is key to mitigating benefits fraud Team effort required Collaboration with various health profession association and colleges, law enforcement, other industries, etc Continued education and communication on how all stakeholders can protect themselves

Tips for Consumers Protect your personal information which includes your benefits plan access information Check your EOB provided by your insurer to ensure it reflects only those services or products obtained by you or your eligible dependents Don’t sign blank forms For more information visit Tips for Consumers

Final thoughts… Prevention: Key to mitigating fraud- reject it before it happens Education: Help plan members recognize how to protect themselves and the benefit plan Team Effort: We all need to work together to assist in mitigating fraud. If you suspect fraud-report it. Fraud: