Beauty treatments paid by insurance fraud

Toronto-area beauty spas are offering esthetic treatments that are paid for through health insurance fraud, a CBC News investigation has found.

Toronto-area beauty spas are offering esthetic treatments that are paid for through health insurance fraud, a CBC News investigation has found.

Customers, spa owners and registered massage therapists are participating in the schemes, which allow clients to receive treatments not covered by supplemental health insurance but claim them as legitimate treatments such as massage.

At one downtown Toronto spa, a $500 package for esthetic services could be claimed as a series of massage treatments.

"If you have insurance, if you pay $500, we put it in registered massage therapy. Your insurance company can pay for that," a spa manager revealed on hidden camera.


Insurance fraud: Where have you seen it?

In exchange for the uninsured treatment, the manager offered six receipts for massage, five predated and one postdated. A registered massage therapist, who did not meet with the client, had signed them.

Neither the therapist nor spa owner would speak with CBC News despite several requests by phone, email and couriered letter.

Fraud difficult to detect

A spa operator hides when faced with questions by CBC's Ioanna Roumeliotis. (CBC)
"We call that theft at the end of the day," said Alistair Forsyth, a senior researcher at the Canadian Health Care Anti-Fraud Association.

CBC News checked with seven spas in the Greater Toronto Area and found five offered fake receipts to allow customers to claim insurance payments they were not entitled to.

One spa representative offered to cover $2,000 worth of cosmetic services with fake receipts.

Forsyth said it's impossible to know how many spas are bilking insurance companies or by how much.

"It's impossible to detect in those situations, because documentation is for all intents and purposes legitimate, and if you don't have somebody to blow the whistle on it, then it's, as I say, virtually impossible."

One whistleblower is frustrated by a lack of action from the insurance companies.

The spa owner said she's losing money to competitors because she refuses to hand out fake receipts.

She doesn't want her identity known for fear of repercussions.

"This problem has been going on and we reported it to a lot of places a year and a half ago. I mean, we reported it to the anti-fraud association," she told CBC News.

"It's not that the insurance companies aren't doing anything about it, they are doing what they can," Forsyth responds.

But he concedes that difficulty in enforcement and minimal criminal punishment for those who are caught allow many spa operators to offer the scheme with little risk.

He said all consumers end up paying for the fraud with higher premiums and fewer benefits.

"Ultimately the victims are the patients themselves. Those who want or need the services may not get them because somebody wanted a free pedicure," he said.