The Canadian Life and Health Insurance Association (CLHIA) is using artificial intelligence tools from Paris-based Shift Technologies to detect insurance fraud in group benefits plans, the association announced Monday.
Benefit fraud is when a plan member or service provider intentionally submits false information to a carrier for a pure financial gain, Joanne Bradley, vice-president of anti-fraud at CLHIA said in an interview. “A trend that is more and more common is collusion, [where] a plan member and a provider work together to submit claims falsely and… [split] that payout.”
In response to this and other methods of fraud, the CLHIA started pooling deidentified data from Canadian life and health insurers in 2021. Although carriers already have their own internal systems to detect suspicious claims, Shift will generate alerts from the pooled data that help insurers identify wider patterns.
For example, Shift can detect “impossible days” where a service provider submits the maximum number of claims they can handle in one day to multiple carriers, Bradley said.
“The work we are doing with the CLHIA builds on those individual efforts to provide a more comprehensive, industry-wide perspective on suspicious behaviour, benefiting all member organizations in their fight against fraud,” Jeremy Jawish, CEO and co-founder of Shift Technology, said in a release.
In 2023, insurers paid $36.6 billion in supplementary health claims, and the CLHIA estimated that fraud activities cost millions each year. Even if only 1% of that were fraudulent, it would add up to hundreds of millions of dollars, Bradley said.
“It impacts plan sustainability,” Bradley added. If the cost of insurance increases due to fraud, employers might limit benefit packages, leading to less help available when employees need it.