Over-inflated charges for assistive devices costing insurance industry

DAILY NEWS Apr 12, 2013 2:35 PM

By: Laura Kupcis, Editor, Claims Canada

2013-04-12

 Implementing standing pricing for assistive devices could save the insurance industry a substantial amount of money, suggests Constable Glen Morash of the Major Fraud Bureau with Peel Regional Police. 

Morash was speaking at ISB Canada’s ISB-U Education Series event, in Milton, Ont. Thursday. 

While investing MVA clinics during a fraud investigation, he said he noticed that a number of patients were receiving household assistive devices paid for by the insurance companies. The devices were all standard items that claims adjusters see regularly, including lightweight vacuums, shoehorns, ergo dynamic devices.

However, when Morash looked into it further, he found that clinics were charging insurers $149 for a light weight vacuum, which in reality was a Swiffer that retails for $34.99. To boot, the clinics would be getting the “vacuum” at a wholesale cost, making the profit even higher for them.

Long shoe horns were being billed at $29.99, with a  wholesale cost of $2.99, hot and cold packs were being billed for $20, when they cost $1.99 retail, and so forth.

“You do that over 60 patients in one clinic in a six month period and it becomes a large dollar fraud,” he said. “But I can’t even really call it fraud because it is accepted by the industry.”

“If the clinic is willing to charge you that and you are willing to pay it, then it is your loss,” Morash said. “We can’t even charge them with fraud for that, unless they come out and tell you it’s something else.”

The description of the product in question is so vague that there was nothing the fraud department could do. “It is all just pure profit for the clinic at a cost to you guys,” he said.

The industry is not looking into these charges because they fall under the threshold of care for the industry — and they are small ticket items that appear once per claimant. The concern is higher price point items, which are claimed frequently over a number of visits over a longer period. “When you start adding it up over and over again, it is a lot of money to them, when it could be a savings to you guys,” Morash said. 

He suggested that the industry should implement a standard pricing on these devices to help save costs