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Healthcare fraud

Region: Ontario Answer # 1565

Healthcare fraud refers to the intentional deception or misrepresentation of information for personal gain within the healthcare system. It involves various fraudulent activities, such as false billing, phantom billing, upcoding, and kickbacks. These deceitful practices not only harm the healthcare system but also compromise patient care and increase healthcare costs.

Types of healthcare fraud

In Canada, healthcare fraud takes on different forms. Some common types include:

  • Physician Billing Fraud: This occurs when physicians submit false claims or overcharge for services not rendered.
  • Insurance Fraud: Individuals may provide false information to obtain insurance benefits they are not entitled to.
  • Prescription Fraud: This involves the illegal acquisition, distribution, or use of prescription drugs for personal gain.
  • Phantom Billing: Providers bill for services that were never provided or were unnecessary.
  • Upcoding: Providers intentionally assign higher billing codes to increase reimbursement.
  • Kickbacks: Illegal payments or incentives given in exchange for referrals or services.

Consequences of healthcare fraud

The consequences of healthcare fraud are far-reaching. They include:

  • Financial Loss: Healthcare fraud costs the Canadian healthcare system billions of dollars annually, leading to increased premiums and reduced benefits for policyholders.
  • Compromised Patient Care: Fraudulent practices can result in unnecessary treatments, delayed care, or even harm to patients.
  • Erosion of Trust: Healthcare fraud undermines public trust in the healthcare system and insurance providers.
  • Legal Ramifications: Perpetrators of healthcare fraud can face criminal charges, hefty fines, and imprisonment.

How companies can prevent and detect healthcare fraud

Preventing and detecting healthcare fraud requires a multi-faceted approach. Some effective strategies include: 

  • Educating healthcare professionals and insurance company employees about fraud schemes and prevention measures.
  • Insurance companies should establish stringent policies and procedures to detect and prevent fraudulent activities.
  • Encouraging collaboration between insurance companies, healthcare providers, and regulatory bodies to share information and identify fraudulent patterns.
  • Employing data analytics and artificial intelligence to identify anomalies and patterns indicative of fraud.
  • Regularly reviewing claims and conducting audits to identify irregularities and potential fraud.

The role of insurance companies

Insurance companies play a crucial role in combating healthcare fraud. They can:

  • Implement advanced technology systems to identify suspicious claims and patterns.
  • Conduct thorough investigations into suspicious claims and collaborating with law enforcement agencies when necessary.
  • Educate policyholders and healthcare providers about the consequences of fraud and how to report suspicious activities.
  • Assist law enforcement agencies and regulatory bodies in prosecuting healthcare fraud cases.

Criminal Code offence and penalties

Perpetrators of healthcare fraud in Canada can face severe legal consequences. Recent cases have resulted in significant fines, imprisonment, and professional license revocations. These legal actions serve as a deterrent and reinforce the seriousness of healthcare fraud. Section 380(1) specifically deals with fraud.


  • 380(1) Every one who, by deceit, falsehood or other fraudulent means, whether or not it is a false pretence within the meaning of this Act, defrauds the public or any person, whether ascertained or not, of any property, money or valuable security or any service,


      • (a)is guilty of an indictable offence and liable to a term of imprisonment not exceeding fourteen years, where the subject-matter of the offence is a testamentary instrument or the value of the subject-matter of the offence exceeds five thousand dollars; or
      • (b)is guilty
        • (i)of an indictable offence and is liable to imprisonment for a term not exceeding two years, or
        • (ii)of an offence punishable on summary conviction,

where the value of the subject-matter of the offence does not exceed five thousand dollars.

Minimum punishment 

(1.1) When a person is prosecuted on indictment and convicted of one or more offences referred to in subsection (1), the court that imposes the sentence shall impose a minimum punishment of imprisonment for a term of two years if the total value of the subject-matter of the offences exceeds one million dollars.

Get help

If you discover you are a victim of fraud, it is a good idea to contact a fraud recovery expert for advice.

If you a have a criminal record due to fraud-related charges (or for any other criminal offence), and wish to erase your record, call toll-free 1-888-808-3628 or learn more at Pardon Partners. It’s easier than you think.

Pardon Partners – Fraud ONPardon Partners – Fraud ON


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