Health work­ers dis­missed over ben­e­fits scam

National Post (National Edition) - - Front Page - JOSEPH BREAN

In what could be one of the largest and long­est-last­ing ben­e­fits fraud schemes ever dis­cov­ered in Canada, a Toronto geri­atric hospi­tal has dis­missed ap­prox­i­mately 150 em­ploy­ees for falsely claim­ing as much as $5 mil­lion in ben­e­fits over an eight-year pe­riod.

“It ap­pears to be or­ga­nized,” said Wil­liam Re­ich­man, pres­i­dent and CEO of Bay­crest Health Sci­ences. “It had to be done in such a way that it would es­cape at least de­tec­tion by the ben­e­fits ad­min­is­tra­tor… It’s a be­trayal of trust.”

As in pre­vi­ous scams of com­pa­ra­ble size, such as the one dis­cov­ered last year at the Toronto Tran­sit Com­mis­sion, this one in­volved mis­use of pre­scrip­tion cov­er­age for or­thotics, knee braces, and com­pres­sion stock­ings, but also phys­io­ther­apy.

On Wed­nes­day Bay­crest fired those em­ploy­ees who did not re­sign after a third­party in­ter­nal in­ves­ti­ga­tion by an auditor. The in­ves­ti­ga­tion found that one em­ployee had taken more than $100,000, and that sev­eral oth­ers had pock­eted amounts in the $25,000 range. The ma­jor­ity of those staff found to be in­volved were union­ized. They span many job cat­e­gories, and in­clude reg­is­tered nurses, whose pro­fes­sion is reg­u­lated and li­censed, such that mis­con­duct must be re­ported to their col­lege. They in­clude per­sonal sup­port work­ers, house­keep­ing and clean­ing staff. There are no physi­cians in­volved.

No crim­i­nal charges have been filed, and none of the al­le­ga­tions made by Bay­crest and its in­ves­ti­ga­tors have been proven in court. Bay­crest spoke with po­lice twice: first sev­eral months ago, then again in the last two weeks to up­date them on the con­clu­sions of their in­ter­nal probe.

The hospi­tal ad­min­is­tra­tion “un­der­took to in­ves­ti­gate this on their own,” said Det. Sgt. John Whit­worth.

His meet­ings with hospi­tal ad­min­is­tra­tion were ad­vi­sory, he said, and Bay­crest has not for­mally en­gaged the po­lice to in­ves­ti­gate.

“If it in­volved pub­lic safety, we would take that de­ci­sion out of their hands,” Whit­worth said. But as it stands, he has not seen any­thing that de­mands po­lice in­ter­ven­tion, so the “ball was left in their court.”

“I an­tic­i­pate that they will be back in touch with my­self next week,” Whit­worth said. But “if they never call me back, we will never do any­thing with it.”

Bay­crest’s in­ves­ti­ga­tion found two main types of fraud. In one, an em­ployee would sub­mit in­voices for ser­vices they never re­ceived, such as phys­io­ther­apy, and pay a kick­back to the provider. In an­other, an em­ployee would ac­cept un­re­lated prod­ucts — purses, for ex­am­ple, or shoes for ath­let­ics or fash­ion — with the provider pock­et­ing the difference in price be­tween those items and the pre­scribed med­i­cal de­vice.

The hospi­tal op­er­ates its own em­ployee ben­e­fit plan from a pool funded 75 per cent by the gov­ern­ment of On­tario and 25 per cent from em­ployee pre­mi­ums, so fraud against this sys­tem dis­ad­van­tages both the pub­lic and the em­ployee’s own col­leagues. The plan is ad­min­is­tered by Cough­lin & As­so­ciates, based in Ot­tawa and Win­nipeg.

Bay­crest said con­sul­tants dis­cov­ered the fraud sev­eral months ago when the hospi­tal hired them to in­ves­ti­gate a pos­si­ble part­ner­ship with other hos­pi­tals in a net­work of ap­proved providers. By look­ing at Bay­crest’s providers, the con­sul­tant rec­og­nized some from other cases of ben­e­fits mis­use in­volv­ing or­thotics, or­tho­pe­dic shoes, com­pres­sion stock­ings and braces.

“That’s where we see the most mis­use,” said Gor­don Burke, pres­i­dent of Orion Au­dit Ltd., the com­pany that con­ducted the in­ves­ti­ga­tion. This area of med­i­cal sup­ply is “highly un­reg­u­lated.”

The roughly 150 em­ploy­ees had been sum­moned to meet­ings at Bay­crest Wed­nes­day where they were told of their fates. Pri­vate se­cu­rity pa­trolled the cam­pus as fired em­ploy­ees were es­corted into taxis or given a few min­utes to get their car and re­turn their park­ing pass. By the end of the day, all those who had not al­ready proac­tively re­signed were ter­mi­nated for vi­o­lat­ing the hospi­tal’s code of con­duct and the trust of its ad­min­is­tra­tion.

All those af­fected had pre­vi­ously been in­ter­viewed, ac­cord­ing to Re­ich­man, in some cases more than once.

“We have sev­eral con­fes­sions,” he said.

One of the em­ploy­ees fired Wed­nes­day, who was in the higher range of mis­used ben­e­fits and agreed to share the for­mal dis­missal let­ter with the Na­tional Post on the con­di­tion they not be named, said the scam was pro­moted by “co-work­ers.”

The em­ployee said they went to a chi­ro­prac­tor, re­ceived in­voices to sub­mit, then kicked back cash to var­i­ous peo­ple at the chi­ro­prac­tor’s of­fice.

The kick­back ra­tio was different for different em­ploy­ees. The em­ployee did this for three years and had al­ready stopped after dis­cus­sion with their spouse by the time the chi­ro­prac­tor closed a cou­ple of years ago.

The let­ter re­ports the hospi­tal’s find­ings that “you, and/or mem­bers of your im­me­di­ate fam­ily, have com­mit­ted mul­ti­ple acts con­sti­tut­ing fraud and/or theft … You de­lib­er­ately and in­ten­tion­ally en­gaged in dis­hon­est and un­eth­i­cal be­hav­iour. For this rea­son, you have ir­repara­bly dam­aged our trust in you.”

This “wil­ful mis­con­duct” is “grossly in­ap­pro­pri­ate in any work en­vi­ron­ment,” the let­ter reads.

“Not ev­ery­body is tak­ing ad­van­tage,” said an­other of the fired em­ploy­ees, a woman who was dis­missed after 15 years work­ing in hos­pi­tal­ity.

She said Bay­crest was treat­ing her un­fairly by not giv­ing her a sec­ond chance and an op­por­tu­nity to pay back the money in ques­tion. She said she learned of the scheme from a co-worker and be­gan claim­ing for phys­io­ther­apy she did not re­ceive in 2012, but stopped two years later.

She said she knew it was against pol­icy, but given that she was pay­ing more each month into a health ben­e­fits plan than she was ac­tu­ally us­ing, she felt she de­served it.

“That’s why peo­ple do things,” she said.

Some of the schemes could have in­volved the in­no­cent par­tic­i­pa­tion of med­i­cal de­vice re­tail­ers, Re­ich­man said. Some schemes nec­es­sar­ily in­volved un­scrupu­lous be­hav­iour by re­tail­ers, such as tak­ing kick­backs or of­fer­ing non-med­i­cal con­sumer goods in­stead of pre­scribed de­vices.

But Bay­crest’s in­ves­ti­ga­tion en­com­passed only its own em­ploy­ees, and made no con­clu­sions about providers.

The date range of eight years re­flects only avail­able records, Re­ich­man said, so in the­ory the fraud could have been go­ing on for longer.

This huge in­stan­ta­neous re­duc­tion in staffing lev­els — some 150 of the hospi­tal’s roughly 1800 em­ploy­ees — was a po­ten­tial cri­sis for the hospi­tal, which has been plan­ning the mass dis­missal for weeks.

Some new staff have been hired, part-timers have been urged to take on more hours, staffing agen­cies have been hired and other con­tin­gency plans put in place.

With a to­tal loss be­tween $4 and $5 mil­lion, ac­cord­ing to Re­ich­man, plus the costs of in­ves­ti­ga­tion, the Bay­crest scheme might be even larger in fi­nan­cial terms than the mas­sive Toronto Tran­sit Com­mis­sion fraud, in which more than 200 peo­ple were fired in 2018 in a scheme that bilked the tran­sit ser­vice of as much as $5 mil­lion.

That case, in which em­ploy­ees took cash kick­backs from an or­thotics provider after sub­mit­ting fraud­u­lent in­voices, led to crim­i­nal charges against ten peo­ple, of which one was with­drawn and nine re­solved with guilty pleas.

MichelQu en neville, pres­i­dent of Cough­lin & As­so­ciates, Bay­crest’s ben­e­fits ad­min­is­tra­tor, said his com­pany has “rig­or­ous stan­dards and pro­to­cols in place to de­fend against and de­tect such ac­tiv­i­ties. This sit­u­a­tion has only served to re­in­force our com­mit­ment to vig­i­lance and an on­go­ing process of con­tin­u­ous im­prove­ment. A num­ber of mea­sures have been im­ple­mented to fur­ther guard against sim­i­lar mis­use.”

Bay­crest would not say the de­gree to which it dis­cov­ered the scheme’s lead­er­ship, other than to say the whole thing was “or­ga­nized.”

“It wasn’t known to us and it wasn’t known to our ben­e­fits ad­min­is­tra­tor,” Re­ich­man said.



A pedes­trian walks past sig­nage for Bay­crest Hospi­tal, where some 150 em­ploy­ees have been ter­mi­nated due to al­leged ben­e­fits fraud.

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