Insurance fraud involves the submission of insurance claims that are fictitious, inflated or misrepresented for the purpose of obtaining improper and illegitimate payouts.
Forensic accountants are often retained to assist in investigating allegations of health benefits fraud that occur at the workplace. It is one of the more frequent forms of insurance fraud. According to the CBC, it is estimated that fraudulent health claims in Canada paid out by private insurers amount to between $600 million and $3.4 billion annually. These costs are incurred by insurers, employers and employees. Workplace health benefits fraud can be carried out by:
- Claimants with insurance policies
- Vendors or Service Providers
The forensic accountants at nagel + associates are well-versed in identifying, managing and resolving cases involving allegations of health benefits fraud, as well as assisting with investigations that include other forms of insurance fraud.
Insurance & Benefits Fraud Case Study
Tom Green worked for a large metropolitan city as the Director of Project Management. In recent months, the amount of Tom’s total debt had substantially increased. He decided that he needed to obtain another source of income to reduce this debt, foolishly opting to defraud the city’s health care benefits plan.Tom concocted a scheme whereby he would submit fraudulent health and dental benefits claims for services and procedures that he never received. To execute his plan of deceit, he would have to forge prescriptions, invoices and receipts from doctors and specialists. The insurer (the city’s health care provider) would then reimburse Tom for the fraudulent health care claims that he submitted. As is often the case with fraudsters who taste success, Tom continued to submit these fraudulent claims without the fear of being exposed. For the following two years, he would continue this scheme with unabated and reckless abandon, seemingly oblivious to its consequences.
During a routine year-end reconciliation and review of the city’s health care benefits plan, a city employee noted that for the previous two-years, Tom Greens’ claim submissions and subsequent reimbursements for health and dental claims were noted to be approximately four times that of the average city worker. The city’s human resource department requested a meeting with Tom to see if he had a plausible explanation for the inflated claim amounts. During the course of the interview, Mr. Green appeared agitated and defensive. As a result, the human resource department recommended that the city hire an independent forensic accountant to review and investigative Tom’s health care claim submissions.
The forensic investigator conducted two interviews with Tom. In order to acquire a greater understanding of the complexities surrounding this case, interviews were also arranged with his manager and two city employees who worked closely with him. Additionally, the forensic accountant performed a review and analysis of Mr. Green’s banking records, obtained relevant data from an email account and cellphone that were issued by the city and took a forensic image of Mr. Green’s desktop and laptop work computers.
The investigation uncovered findings of $64,550 in fraudulent health care claim submissions over a two-year period. Tom Green was immediately dismissed with just cause, and the forensic accountants report was turned over to the police, in support of the city’s criminal complaint.
Relevant Evidence:
- Financial records
- Health Care claims forms
- Invoices
- Doctor prescriptions
- Forensic image of electronic devices
- Interviewing the suspect and other relevant third parties