Criminal healthcare companies are costing the taxpayer “hundreds of millions of euros” through fraud, local authorities organisation VNG has said, after carrying out the first ever assessment of the situation nationwide.

The Netherlands has thousands of small companies offering care services, ranging from community nursing operations to psychiatric services, youth coaching, and residential care.

They are funded by local authorities and health insurance companies, often via PGBs, or personal care budgets which allow people who need care to buy in services themselves.

Fraud can take many forms, often by billing for hours that they did not work, but in some cases companies are claiming cash without providing any services at all.

The VNG said in the majority of cases, the companies are claiming money for non-existent help. In the last year alone, up to €625 million was pocketed by fraudsters, the VNG said.

“Healthcare funds are leaking away and into the pockets of criminals,” the VNG said in its report. The more vulnerable the person, the more likely they are to fall victim to fraudsters, particularly when it comes to people who live in sheltered accommodation and need individual help, the VNG found.

Local authorities took over the task of allocating healthcare money in 2015 but do not have sufficient tools or manpower to detect fraud, experts told the Telegraaf.

“Hardly any checks are carried out to see if the person is getting the help they bought and if they are getting the hours that are being declared, and criminal organisations know it,” health economics professor Wim de Groot told the paper. People with dementia or youngsters with a mental impairment can get a personal budget very simply and make an easy target, he said.

In 2022, local authorities reported just 113 cases of fraud. According to De Groot, local authorities lack the expertise to detect fraud because of a complicated network of care providers.

Health law lecturer André den Exter said local authorities need to recruit many more staff to monitor care providers. “Insurance companies have whole departments dedicated to detecting fraud. Local authorities have two people on the job,” he said.

A new law which will allow local authorities to share data and which will come into effect this year will also make it easier to detect fraud, Den Exter said. In 2022, the national audit office said efforts to combat fraud in the healthcare system are failing and the chance of being caught is extremely low.

Two years ago a report published on behalf of the health ministry said that several small care organisations in Twente forced their vulnerable clients – often troubled youngsters or people with psychological or addiction issues – to work on marijuana plantations and even trafficked them for sex.