Healthcare insurance fraud costs St. Maarten government millions

POSTED: 01/13/12 11:58 AM

Increase in swindling due to Brooks Tower Accord

St. Maarten / By Hilbert Haar – Fraud with healthcare insurance is costing the St. Maarten government millions of guilders every year, the Ipol-report Criminaliteitsbeeldanalyse Sint Maarten about organized and community crime on St. Maarten claims. The large number of illegals – estimated at 15,000 in the report – and their interaction with mala fide and bogus-employers play a role in this scheme. The report’s authors, Sally Mesu and Ewout Stoffers, write that the Brooks Tower Accord has led to a strong increase in fraud cases.

The fraud involves false employment certificates; illegals use these documents to obtain a healthcare insurance. Twelve days after the paperwork is completed, policy-holders are entitled to medical coverage.

“Illegals often go to a mala fide employer or a bogus employer, pay a significant amount of money and are then put on the employer’s payroll. The employer does not pay premiums, but issues a false employment certificate. Employers demand between $100 and $250 for such a certificate, but there are also employers that use a $100 per month subscription tariff,” the report states.

The employment certificate entitles illegals automatically to healthcare insurance. The proof of registration with the insurer increases their chances to obtain a residence permit, because they create the impression that they have a job.

The body that executes social and healthcare insurances in St. Maarten, USZV, told the authors that fraud with false employment certificates has escalated over the past five years. “Until five or ten years ago there were one or two companies that issue these certificates, but the USZV estimates that there are now fifteen. It does not exclude that the execution of the Brooks Tower Accord has played a role in this development, because it makes it attractive for employers to put illegals on the island for a fee on their payroll.”

The report notes “that some companies were established just before the implementation of the Brooks Tower Accord and that they suddenly had a lot of employees. A recent investigation showed that three companies in St. Maarten respectively put 150, 220 and 50 employees on their payroll without paying premiums for them. They only paid premiums for the people that were really working for them, usually just a few.”

The authors calculate that the fifteen swindling companies on average have one hundred fake employees on their so-called payroll. The annual USZV-tariff for general practitioners of 137 guilders ($76) per insured party puts this damage alone at 205,000 guilders, or roughly $114,000. But the real damage is much higher, the report states, because the insurer also pays other players in the healthcare industry like hospitals, physiotherapists and pharmacies. The thing is of course that the damages are of a recurring nature: “As long as the caregivers keep submitting claims for insured illegals the USZV keeps paying year after year, unless it detects the fraud.”

There is another aspect to healthcare insurance fraud: the simple desire of people to get medical care. “People come from surrounding islands to St. Maarten to use the relatively good healthcare and the possibility to get compensated for loss of wages and medical costs.”

Twelve days after registration with the “employer” the entitlement to compensation starts. In St. Kitts this period is between three and six months and payments for loss of wages begin only after the premium for these months has been received. The report states that “the favorable care and insurance climate in St. Maarten” attracts illegals from Haiti, the Dominican Republic, Jamaica, Dominica and Guyana, and to a lesser extent from Trinidad and Tobago, Grenada, Montserrat, St. Lucia, St. Kitts and Antigua.

In a footnote, the report points out that Unaid-figures indicate that more than 2 percent of the population of the Bahamas, Belize, the Dominican Republic, Guyana, Haiti and Trinidad and Tobago are infected with HIV or Aids. “The Caribbean region is the most affected region in the world after sub-Saharan countries on the African continent. The unbalanced division of resources, and poverty, unemployment, political instability and conflicts lead to the relocation of HIV and Aids, because ill migrants are going to search for medical care in other countries like St. Maarten. This often results in a higher infection-risk for especially other migrants.”

The report furthermore notes that employers sometimes put other people on their payroll that don’t belong there either. One example is of an employer who put his babysitter on the payroll; a second example concerns an Indian jeweler who “payrolled” an Indian cook who cooked for the employees that lived with him. Both were not entitled to coverage because they only did domestic work. When the fraud was detected, the jeweler put the cook on his payroll as a salesman. “The suspicion is that the salesman still works as a cook in the household,” the authors drily note.

Construction companies often register employees only after they have had an accident while claiming that the employee started just a month ago; in reality these workers are more often than not already on the payroll for two years. The report estimates that three quarters of all employees at construction companies are not insured according to the rules.

The authors expect that fraud with healthcare insurance will continue and probably even increase in the future. “Controls on this method of fraud are seriously deficient, while the population of illegals keeps growing. That controls fail is mostly due to a lack of cooperation between government agencies; this is in turn due to inadequate registration systems at the census office, the tax inspectorate, immigration and the USZV. These administrations are not linked, so it is not possible to check whether someone has legal residence status, if someone has a job, or if the employer is paying premiums.”

As long as the supervision over illegals and mala fide employers does not improve, the authors warn, “fraud with healthcare insurance will sooner increase than diminish. In an existence without perspective poor and ill migrants hardly have anything to lose and they will keep making attempts to illegally obtain healthcare insurance. Poor people are more vulnerable for diseases and other physical complaints. (….) The current situation requires a better supervision over incoming migrants, a better registration of citizens and companies in St. Maarten, and linking the registration systems of government agencies.”

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