Baycrest Health Sciences has fired, or accepted the resignations of, about 150 employees for alleged health benefits fraud worth millions of dollars.

The prominent geriatric facility on Bathurst St. said the losses are estimated at $4 million to $5 million, but the final tally — these include the cost of unravelling the mess, hiring replacement staff and implementing preventative measures — has yet to be calculated.

One person scammed the plan, which is 75-per-cent financed by taxpayers and 25-per-cent by employees, by as much as $100,000, while most of those involved racked up about $20,000 in bogus claims, the hospital alleged.

Baycrest said in a statement emailed to the Star that concerns about misuse of health-care benefits arose last year. The facility says it retained an outside auditor to look into the situation, and the auditor found “irregularities.” A subsequent workplace investigation discovered many employees had been misusing the benefits plan for years.

“We are extremely disappointed by these findings as we view any misuse of our benefits plan as inconsistent with our policies and procedures and incompatible with our Baycrest values,” the statement reads.

Michelle Petch Gotuzzo, spokeswoman for Baycrest, said the alleged scheme involved submission of receipts for services or products that weren’t received. In other cases, a person would claim reimbursement for an authorized item such as a compression stocking, but use the cash to buy something unauthorized.

Employees involved spanned a variety of job categories, Petch Gotuzzo said.

None of the allegations against the terminated employees have been proven in court.

In all, Baycrest employs about 1,800 people.

Provincial Health Minister Christine Elliott has been in contact with Baycrest and the Ontario Hospital Association and meetings are planned to discuss next steps, her spokesman, Travis Kann, said on Thursday.

“From what we currently know, it’s clear that long-standing auditing weaknesses allowed this sort of brazen abuse to go unchecked for too long,” Kann said. “Minister Elliott’s immediate priority is ensuring that Ontario’s hospitals put in place the appropriate controls so that this will not happen again.”

Kann also said Elliott had made it clear there should be no disruption in patient care while the problem is dealt with. Baycrest said it had a “comprehensive plan” to ensure adequate staffing levels and quality of care despite the mass exodus due to the alleged fraud.

The hospital said it had been in contact with Toronto police, but there was no word on any possible criminal probe.

Baycrest said it plans to have its external benefits administrator conduct additional audits. It said it would set up an approved provider network and ensure staff understand the benefit plan and what misuse is.

“We remain committed that all public dollars allocated to Baycrest are being spent to ensure an exemplary care experience for the community we serve,” Baycrest said.

Health benefits fraud occurs on a daily basis all over Canada and hundreds of millions of dollars a year are lost to fraudulent activities, said Susan Murray, vice-president of goverment relations and policy at Canadian Life and Health Insurance Association (CLHIA).

“Benefits fraud is more common today and becoming more sophisticated,” said Murray, who noted that the Baycrest episode highlights the “unfortunate reality” that industry experts have known about for a while.

“It can occur at all levels, meaning a plan member, or several plan members, working together, (or) a provider or a medical supplier.”

The Ottawa-based group launched an education awareness campaign last year, aimed at helping members of the public use their benefits appropriately and for employers to recognize and report fraudulent activities.

As part of the exercise, the Fraud = Fraud program commissioned a poll that found many people are ignorant of the fact that being found guilty of a health-benefits scam can bear huge consequences such as the loss of a job or the gain of a criminal record and jail time. Murray said that at least 75 per cent of Canadians surveyed thought the only consequence of the benefits scam is for insurance premiums to go up.

“Health and dental benefits fraud is a real crime with real consequences, but not many people understand how it can affect them on a personal level,” she said.

The alleged Baycrest frauds echoes a health-benefits claims scandal that rocked the TTC a few years ago, in which 10 employees were criminally charged and more than 150 others were fired, resigned or retired.

The TTC scheme involved local orthotics store Healthy Fit allegedly providing bogus receipts for services that were never received, and ballooning costs for insurance claims that TTC workers charged to Manulife Financial. At one point during the audit, which started in 2014, about 600 TTC employees were being investigated for false health benefits claims that totalled more than $5.1 million.

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In 2017, St. Michael’s Hospital fired a total of 31 employees after an internal routine audit found them to have misused its benefits plan in a alleged scam that cost the hospital an estimated $200,000.

Baycrest says it has a “comprehensive plan in place” to ensure there’s adequate staffing and continued service delivery during the abrupt mass termination.

“To help prevent a similar occurrence in the future, we will ensure that our external benefits administrator will conduct additional audits, we will set up an approved provider network, and further education will be provided to our staff regarding our benefits, what they are for and what constitutes misuse of our benefits plan,” the statement says.