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Medical insurance fraud widespread, as employees, providers rip off benefit plans

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Employers and their insurance providers are reeling at the proliferation of fraud rings — groups of employees that work together to abuse and exploit benefit plans, with medical services providers as their eager accomplices.

“You’re sitting in the lunchroom when a co-worker comes in and says, ‘I’ve got $1,000 worth of massage receipts, $2,000 worth of physiotherapy receipts, submit them all, and we can share the money,'” explains Gary Askin, a former commander with the Waterloo, Ont., police force who now works as a fraud investigator with Sun Life.

Cash, cash cards, purses, designer sunglasses, coats, and iPads are examples of what people have been able to get with fraudulent health benefit claims.

“They’ll say there’s no need to worry about getting caught, because they know the provider, and if the insurance company calls them, they will validate the claim.”

Askin refers to fraud ring organizers as “recruiters” and says the schemes can grow quickly, as employees reap rewards and spread the word.

Former police commander Gary Askin now works with insurance giant Sun Life, investigating cases of benefits fraud. (John Lesavage/CBC News)

“They rationalize it by saying ‘you didn’t get a raise last year,’ or ‘don’t worry, it’s just the insurance company’s money.’ They make some very compelling and convincing arguments.”

Sun Life estimates that 85 per cent of its fraud losses involve collusion with a medical services provider.

Clinics that offer massage, physiotherapy, orthotics and compression stockings are most commonly used. Sun Life “delisted” a whopping 1,500 providers across Canada last year alone, after proving they had been involved in false claims. Claims from those clinics are no longer accepted.

“You’re stealing from your employer,” says Dave Jones, Sun Life’s head of group benefits. “You are stealing from the wallet of money, if you can think of it that way, that’s used to pay for your health care, and the health care of your family, and the health care of your friends and colleagues at work.”

The industry association has recently launched a public awareness campaign called “Fraud=Fraud,” to educate Canadians about the problem. The website features a link to a page of email addresses and phone numbers, where suspected cases can be reported to authorities.

An image from the CLHIA’s public education campaign. Many employees don’t realize that criminal charges as well as termination of employment can be among the consequences of benefits fraud. (CLHIA)

One case that made headlines in 2018: the Toronto Transit Commission fired 250 employees after discovering they were all involved in a scam related to orthotics. The service provider — who facilitated the entire escapade — has been sentenced to two years in a federal penitentiary plus three years on probation.

Meanwhile, a Toronto firefighter was sentenced to six months in jail for submitting $32,000 in forged receipts. A professor at York University appealed her firing after falsifying invoices for $8,000 worth of massage and physiotherapy, but lost.

How it’s done

A typical scam might involve compression stockings. The fraudulent provider is aware that a particular company’s benefit plan will cover four pairs in a year, at a cost of $220 each.

When an employee arrives with their prescription, the provider presents a new and enticing offer: pay for all four, submit the receipt and be reimbursed in full by the benefit plan — but receive just one pair of compression stockings and collect some “incentives” on the side.

Insurer Green Shield Canada sent an undercover investigator into one such meeting in an Ontario city last August to pose as an employee. She recorded the meeting with a hidden camera.

“I can give you the website, you can choose what kind of shoes,” the provider tells the investigator, who selects a pair of Ugg boots.

“Show it to your husband too, OK?” he adds, well aware that the plan will also cover a spouse’s medical needs as well.

Sun Life’s Dave Jones says the company’s fraud team includes close to 100 investigators, some of them former police officers, others are data scientists. (Ed Middleton/CBC News )

Green Shield’s Brent Allen says providers often encourage scam participants to max out on their plans’ provisions. He’s seen employees collect all manner of goods.

“We wouldn’t think it’s acceptable to steal from our employer outright,” he says.

“If you saw somebody walking out with an iPad that the employer had bought, you would be offended by that. Then why is it OK to go to a provider and get an iPad that that employer paid for?”

Life and death decisions

Allen attributes the fraud epidemic to greed.

“There’s a lot of money in our industry,” he says. “People are going to want to take pieces of it.”

In total, private insurers paid out $34 billion in health claims last year, according to the Canadian Life and Health Insurance Association (CLHIA). Estimates for the number of fraudulent claims range from two to 10 per cent, meaning between $600 million and $3.4 billion is being stolen annually.

Those costs can be paid indirectly by honest, innocent employees.

“There are life-saving drugs available under these plans that can cost hundreds of thousands of dollars,” Allen points out.

And employers can’t afford to be paying hundreds of thousands of dollars for claims that aren’t real when they have somebody truly in need. It’s forcing employers to make decisions about whether they cover expensive drugs that could be the difference between somebody living or dying, working or not working.”

Data and artificial intelligence

The CLHIA’s public awareness campaign includes advertising on Facebook, LinkedIn and Twitter. A professionally produced commercial shows an employee being escorted out of the office by security with a box of their belongings, while shocked co-workers stand and stare.

“You were appreciated and liked, soon to be rewarded with a promotion and raise. But you threw it all away,” intones a sombre voice-over. “So if you’re thinking about falsifying your health or dental claim, think again.”

But as schemes become more sophisticated, so do detection methods. Green Shield uses an artificial intelligence program to spot fraudulent claims. Sun Life has a team of almost 100 investigators, using special software to make connections between suspicious clinics and employees using them.

“These are resources I would’ve died for in policing,” says investigator Gary Askin. “We’ve got more data scientists working for Sun Life than any police service in the country, with the exception possibly of the Mounties.”

The industry association hopes its awareness campaign will generate a number of tips regarding cases of suspected fraud. The message they’re trying to send is clear: if you’re not prepared to do the time, don’t do the crime.

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Real Estate

7 Tips For First-Time Home Buyers In Calgary

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Buying a house for the first time can be overwhelming to say the least. If you’re wondering what neighbourhood to go with, what you can afford, or even how to just get started on the process, let us take some stress off your hands! We’ve teamed up with Hopewell Residential to give you 7 tips to ensure the home you end up with is everything you dreamed of.

Hopewell Residential is a five-time Developer of the Year award winner, so their expertise is second-to-none in Calgary and beyond. Who better to learn home-buying tips from than the homebuilders themselves?

Create a checklist of needs & wants

This is a biggie. When you’re buying your very first home, you’ll want to weigh your needs vs. your wants. Ensuring you have what you love in your first home is a big, big deal.

What should you do? Easy. Set up a list of needs and a list of wants, but be pretty strict with yourself, and make sure you take your lifestyle into consideration. With the increase in remote work over the past year, it’s important to keep in mind that a home office or flex room might just be the key to maximizing at home happiness. Especially if you’re thinking you might be expanding your family later on, spare rooms and extra space is key (but more on that later!).

Or for instance, you might need a home in an area with a high walkability score, but you want to be close to certain amenities. Set yourself up with the right level of compromise and the number of homes that actually fit your ‘perfect’ idea will skyrocket.

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‘Don’t give up’: Ottawa Valley realtors share statistics, tips for homebuyers in ‘extreme’ sellers market

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The real estate market in the Ottawa Valley can be summed up this way: people from far and wide are in a buying frenzy, but there’s hardly anything to buy at the “store,” and the limited inventory is overpriced.

This “stampede” — as one realtor described it — will affect rural towns as residents grapple with finding affordable housing and agonize over their inability to purchase homes in their price range.

“We are seeing a lack of inventory in all price ranges,” said Laura Keller, a real estate agent from Carleton Place.

Helen Vincent, a Renfrew realtor, said she’s never seen a market like this in her 36 years of practice. “We postpone offers for four to five days in order to get all the buyers,” she said.

Multiple offers — between seven and 10 — became the norm, with cash offers and no conditions, as buyers faced bidding wars. “In Ottawa, they have up to 50 (offers),” she added.

“It’s very stressful. You’re going to get nine (people) ticked off, and one happy. So many people are disappointed,” Vincent said.

Terry Stavenow, an Arnprior realtor for 40 years, said that “the pent-up need took over with inventory going low. It made a stampede on everything that was available.“

“Brand new housing — it’s very much gone. Several building developers are rushing to get inventory. They usually don’t do construction in the winter months,” said Stavenow.

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Real Estate

10 Tips For First-Time Home Buyers

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Buying a home for the first time is exciting and a commitment to the future. It’s often challenging, too, and the process requires a lot of steps, many of which can be tricky to navigate as a first-time home buyer.

What are some things you should keep in mind as a first-time home buyer?

First-Time Home Buyer Tips

Here are 10 tips to keep in mind as you begin your journey toward homeownership.

1. Have Your Finances in Order

It’s wise to begin saving as early as possible once you’ve made the decision to purchase a house. You’ll need to consider the down payment, closing costs (which often range from 2% to 5% of the down payment), as well as move-in expenses.

You also need to understand the other costs of homeownership, such as mortgage insurance. property taxes, utilities, homeowner’s insurance, and more.

2. How Much Can You Afford?

Knowing how much you can realistically afford in a home is another important financial consideration. Look for the home of your dreams that fits your budget.

One way to avoid future financial stress is to set a price range for your home that fits your budget, and then staying within that range. Going through the preapproval process will help you understand what price range is realistic for your budget.

3. Make Sure Your Credit is Good

Another thing to keep in mind as a first-time home buyer is your credit score because it determines whether you qualify for a mortgage and affects the interest rate that lenders offer. 

You can check your credit score from the three credit bureaus – Experian, Equifax, and TransUnion.

This is another good reason for getting preapproved before you start your search. Learn more about the preapproval process and your credit score.

4. Choose The Right Real Estate Agent

A good real estate agent guides you through the process every step of the way. He or she will help you find a home that fits your needs, help you through the financial processes, and help ease any first-time buyer anxiety you may have.

Interview several agents and request references.

5. Research Mortgage Options

A variety of mortgages are available, including conventional mortgages – which are guaranteed by the government – FHA loans, USDA loans, and VA loans (for veterans).

You’ll also have options regarding the mortgage term. A 30-year fixed-rate mortgage is popular among many homebuyers and has an interest rate that doesn’t change over the course of the loan. A 15-year loan usually has a lower interest rate but monthly payments are larger.

6. Talk to Multiple Lenders

It’s worth your time to talk to several lenders and banks before you accept a mortgage offer. The more you shop around, the better deal you’re liable to get – and it may save you thousands of dollars.

7. Get Preapproved First

Getting a mortgage preapproval (in the form of a letter) before you begin hunting for homes is something else to put on your checklist. A lender’s preapproval letter states exactly how much loan money you can get.

Learn more about the preapproval process and how preapproval provides you with a significant competitive advantage in our article How Preapproval Gives You Home Buying Power.

8. Pick the Right House and Neighborhood

Make sure to weigh the pros and cons of the different types of homes based on your budget, lifestyle, etc. Would a condominium or townhome fit your needs better than a house? What type of neighborhood appeals to you?

9. List Your Needs and Must-Haves

The home you purchase should have as many of the features you prefer as possible. List your needs in order of priority; some things may be non-negotiable to you personally.

10. Hire an Inspector

Hiring an inspector is another crucial step in the home buying process. An inspector will tell you about existing or potential problems with the home, and also what’s in good order. You can learn more about home inspections and how to find a home inspector through the American Society of Home Inspectors website.

Buying a home for the first time is a challenge, but it’s one you can handle with the right planning and preparation.

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