Baycrest Hospital lets go of 150 employees over benefits fraud

Baycrest Hospital (Google Street View photo)

Baycrest Health Sciences has responded to an explosive story in the National Post, which revealed that Baycrest Hospital let go of some 150 employees, due to their alleged involvement in a multimillion-dollar insurance scam.

The fraud, which “appears to be organized” – as Baycrest CEO William Reichman described it in the July 10 edition of the Post – resulted in a mass dismissal or resignation of employees who falsely claimed as much as $5 million in benefits over an eight-year period.

Reichman called the episode “a betrayal of trust.”

The scam reportedly involved the misuse of insurance coverage for orthopedic devices, such as knee braces and compression stockings, and physiotherapy.

On July 10, Baycrest fired those employees who did not resign after a third-party internal investigation was conducted by an auditor, the Post reported.

“The investigation found that one employee had taken more than $100,000, and that several others had pocketed amounts in the $25,000 range,” the story went on. The employees spanned several job categories, including registered nurses, “whose profession is regulated and licensed, such that misconduct must be reported to their college.” They also included personal support workers, as well as housekeeping and cleaning staff. No physicians were involved.


While Baycrest consulted police twice during the course of its investigation, no criminal charges have been filed and the facility has not engaged police services.

The day after the story was published, Baycrest issued the following statement:

“Baycrest cares immensely about ensuring the well-being of our patients, residents and their families. We remain committed that all public dollars allocated to Baycrest are being spent to ensure an exemplary care experience for the community we serve.

“Last year, in the course of exploring the establishment of an approved provider network for employee benefits, concerns were raised about the extended health-care claims some of our employees were making under our benefits plan. As a result, we retained a third party to conduct an audit of our employee extended health benefits plan. This audit found irregularities.

“We then conducted a workplace investigation, which found that a significant number of employees were misusing our benefits plan over the course of a number of 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. As a result of the investigation thus far, approximately 150 people are no longer with our organization through a combination of terminations and resignations. The employees involved spanned a variety of job categories.

“We want to assure our residents, patients and their families that we have a comprehensive plan in place to enable adequate staffing levels and maintain the quality of care we deliver.

“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 Post revealed that Baycrest’s investigation found two main types of fraud: “In one, an employee would submit invoices for services they never received, such as physiotherapy, and pay a kickback to the provider.

“In another, an employee would accept unrelated products – purses, for example, or shoes for athletics or fashion – with the provider pocketing the difference in price between those items and the prescribed medical device.”