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Toronto auditor general finds city health benefits management ripe for abuse, fraud

Toronto's auditor general has called on the city management to implement measures to ensure adequate controls and monitoring of benefit claims, after finding flaws in the city's oversight and benefit plan design which raise suspicions of or potential for abuse.

March 28, 2017  By Mari-Len De

In her March 20, 2017 report, Toronto Auditor General Beverly Romeo-Beehler cites the risks for fraud, waste and abuse of employee health benefits.

“Overall, we found the controls and monitoring of the City’s benefit claims ineffective in identifying unusual patterns or potential frauds,” the report said.

Extended health care benefits are covered 100 per cent by the city. In 2015, about 80,000 individuals were covered under the city’s health benefits plan, costing the city approximately $229 million.

“As with any program of this size and complexity, numerous risks exist to the program including fraud, waste, and abuse of employee benefits,” the auditor general report said. The report cited the recent multimillion-dollar health benefits fraud investigation involving the Toronto Transit Commission.


Among other things, the report found physiotherapy as the most costly extended health benefit for the city, averaging $10 million per year.

The auditor general report also cited suspicious activities of at least two medical supplies and equipment providers, as well as instances of overutilization of benefits for orthotics and other medical devices.

It also cited suspicious benefit claims activities. In one instance, a family of six received massage therapy on the same day on six different occasions within 10 weeks, with reimbursements totaling about $3,000. “On each date the family claimed a total of 5.5 hours of massages, each signed off by the same massage therapist.”

Other suspicious instances involve individuals claiming reimbursement for three or more different types of services – such as massage, physiotherapy, chiropractic, osteopathy – on the same day.

“We recognize that there may be legitimate reasons for the above instances. Nonetheless, in our view, they are unusual cases that should have been identified and examined further,” the report said.

The auditor general outlined 16 recommendations to help improve controls and administration of the city’s extended health benefits program.

Read the full auditor general’s report here.

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