Fraud taking $260 million out of the system: health ministry system, people

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Fraud taking $260 million out of the system: health ministry
There are 9.1 million BC CareCards in circulation for a population of only 4.5 million

B.C.’s health ministry estimates it is being defrauded of potentially $260 million in health care insurance every year, partly as a result of people illegally accessing medical services through fake, stolen or borrowed CareCards.

The British Columbia estimate was extrapolated from figures from the Canadian Health Care Anti-Fraud Association, which suggests between two and 10 per cent of every health care dollar is lost to fraud. The health ministry’s total budget for 2010-11 was $14.8 billion.

In B.C. this ranges from misuse of CareCards to inappropriate billing by physicians, B.C. health ministry spokesman Stephen May said. He said the province doesn’t have an accurate breakdown on how much of the loss is related to CareCard fraud, but suspects it loses “tens of millions of dollars” as a result of people, including residents from the U.S., accessing the Medical Services Plan without paying into the program.

Those enrolled in MSP can access publicly paid hospital treatment, as well as subsidized coverage for ambulance service and prescription drugs. There are 9.1 million BC CareCards in circulation for a population of about 4.5 million.

May noted more of the plastic cards, introduced in 1989, are falling into the wrong hands. The two main types of fraud include identify theft, which has led to counterfeit cards with fake IDs in the system, and an influx of non-residents or people not registered with MSP using their friends’ or family members’ cards to access medical care.

Others use fake CareCards to get controlled prescriptions such as OxyContin and methadone, and then resell the drugs illegally, he said.

The province hopes to curb some of this fraud by introducing a new, high-tech, photo CareCard, which would offer more security benefits than a driver’s licence, including anti-forgery features, identity proofing, a security chip and recent photograph.

The new program is expected to cost $10 million in capital costs, with an annual $28 million to operate it over five years. The total, about $150 million, would be used to update the MSP registry with better fraud-detection software and hire more staff to update the database to include the B.C. patients re-enrolled in the program, May said.

The health ministry estimates the amount saved by reducing fraud would exceed the $10-million capital costs.

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Under the new plan, B.C. residents will have to re-enrol in the province’s health care system to receive the new card — with the exception of people under 19 and certain elderly or disabled people — and then renew their CareCards every five years to stay eligible for health care benefits.

If they don’t, they’ll be ineligible for publicly paid health care services, but will still be given care in emergency situations, according to a news release.

Drivers may also be able to re-enrol when they renew their driver’s licence, linking both forms of identification to the same expiration date.

“By introducing these measures and decreasing fraud, the cost of putting the whole thing in is a net benefit,” May said.

The provincial government said in a statement that proof of identity will help doctors and other health care providers ensure care is being provided to the right person, especially as B.C. CareCards are considered a form of government-issued ID.

If the legislation is passed into law, the government said it will work on phasing in the new CareCards over five years, beginning before the end of 2012.

New Democrat health critic Mike Farnworth said Friday it’s clear there needs to be improvements to B.C.’s CareCard system, but said the provincial government plan has no proof that the new cards will prevent fraud. He said while it’s shocking that the province estimates it is losing $260 million annually to fraud, the government’s claim — as well as its plans to spend $150 million on the program — should be backed up with specific numbers on how many people are using the system without paying and how they’re doing it.

“One of the key questions they have to answer is how much [fraud] is going on and how long have they known about it?” he said.

He noted the province must have known the extent of the fraud and questions why nothing was done sooner. “If you know that amount of fraud is going on you’d think they’d do a detailed examination,” he said. “To come out with that type of figure they must have had some indication of what was going on.”

Farnworth said the latest move has “all the hallmarks of being the latest B.C. Liberal boondoggle.”

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peter236

The corruption in health care is quite big.