Health insurance fraud is described as an intentional act of deceiving, concealing, or misrepresenting information that results in healthcare benefits being paid illegitimately to an individual or group. The main purpose of fraud is financial gain.
One of the largest single sources of fraud is the healthcare providers. They usually have a detailed knowledge of the policy condition and reimbursement process which makes it very difficult to detect such frauds.
INCIDENCE
It has been estimated that between 4 – 10 per cent of medical insurance claims may be fraudulent or exaggerated in Australia, UK and the US. In the UK, the loss is around £1.5 billion annually. This adds almost 5% to the premium of an average insurance policy. $30 billion loss occurs each year in USA due to healthcare insurance frauds. Other agencies such as the Australian Institute of Criminology, South African Insurance Association (SAIA) and in Malaysia and India put the figure at 10 – 15% of claims paid out. The worry is that these figures only reflect detected cases and the actual incidence of fraud may be much higher. Indian insurance companies lose approximately INR 600 crores annually on false claims every year. Health insurance is thus a bleeding sector with very high claims ratio mainly due to fraud.
The reasons for this high incidence are multifold. Some of the major ones are:
- Too many ambiguities and loopholes in policies
- Policies not keeping pace with rapid medical advances in technology and therapy
- Easy to defraud system since insurance companies cannot keep tabs on every policyholder and provider
- Difficult to deny claim once member has availed of hospital treatment
- Very difficult to detect small frauds
- Obtaining proof of fraud is often very difficult especially when the policyholder and provider collude against the insurer.
- Lack of medical expertise in insurance companies allows doctors to carry out unnecessary or costly tests and treatments
- Insurance companies do not wish to take action against providers for fear of antagonizing them and losing them from their network
- Individual insurance companies are more concerned about maintaining profitability rather than with reforming the system.
- As far as Indian insurers are concerned, companies are in a denial and forfeiture mode and, hence, unable to formulate a strategy to combat fraud.
Insurance fraud affects all stakeholders i.e. insurance companies, policyholders, hospitals, doctors and the Government.
INSURANCE COMPANIES
Higher claims payments and payments for unnecessary tests and treatments result in increased losses for the company. Smaller companies may be forced to close down.
In order to redeem their losses insurance companies have to:
- Charge higher premiums
- Restrict or cap benefits
- Increase insurance co-payments
- Raise threshold for denial of claims
- Empanel poorer quality hospitals that have lower tariffs
These may adversely affect their market share and enrolment of policyholders.
POLICYHOLDERS
Policyholders suffer because of all the above. Unscrupulous providers may make them undergo unnecessary tests or, even worse, undergo unnecessary treatments or surgeries that are painful, injurious or can even be fatal.
HOSPITALS AND DOCTORS
There is a loss of faith in the provider and the nobility of the medical profession. Hospitals risk de-empanelment and blacklisting so no insurance company will take them in their network. Legal action may be taken due to commission of fraud. Doctors risk being struck off the Medical Council due to illegal activities.
GOVERNMENT
Public sector companies have to be supported hence there is loss of money from the Government exchequer. Poor quality of healthcare due to fraud impacts on the health of the nation. Higher premiums mean less uptake of insurance. Public will now rely more on Government hospitals that are already overburdened.
THE REMEDY
Almost every insurance executive and agent is aware of the occurrence of fraud. However, some form of training is required to heighten this sense of awareness and equip them with information that will help them suspect and detect cases of fraud.
A means to combating insurance fraud is through education. More and more insurance companies are beginning to mandate Insurance Fraud Training to all integral insurance personnel. As more fraud seeps into every country, companies must establish plans to include education into their requirements.
There is an urgent need in India for this kind of training. However, training may mean taking insurance executives off work for several days to attend programs that have to be held in multiple locations to enable access of staff in different regions. There is also a dearth of qualified insurance fraud trainers in the country.
ONLINE COURSES
The North American Training Group (NATG), located in Florida, USA, has been offering online Insurance Fraud Training in the USA and Canada. The international division, International Fraud Training Group (IFTG) has been providing fraud training to Africa, Asia and Europe for all lines of insurance and for all insurance professionals as well as investigators who conduct insurance investigations. International Fraud Training Group’s top industry professionals have years of anti-fraud experience. IFTG’s European office is located in Bergen Norway.
Helpmate Services in India (http://helpmate.co.in), a leading healthcare education provider, has teamed up with NATG and IFTG to offer training certification in a wide variety of insurance fraud related courses in India, the Middle East and Africa. These online courses are extremely useful for training staff in insurance companies to detect, manage and prevent fraud in the different areas of insurance (http://buy.helpmatetraining.com/index.php/helpmate/).
These courses provides the insurance professional with a thorough knowledge of medical and healthcare fraud, the growing statistics of insurance fraud, the laws that are designed to protect consumers and taxpayers from losses suffered as a result of such fraud, and techniques both the public and insurance/investigative professionals can utilize to combat fraud.
Concepts introduced are illustrated with real life examples, news articles and videos intended to put these ideas into context. Insurers will learn successful investigative techniques that can be used by field investigators, how to plan for investigations and learn the types of investigations that can be conducted. Completion of these courses will provide an all-inclusive understanding of the scope of this problem, ranging from the simplest situations to complex and sophisticated healthcare insurance fraud crimes and the role that insurers can play to combat fraud. There is a whole section devoted to India Healthcare Courses where health, life and disability insurance fraud courses are available. The prices are also very reasonable considering the volume of up to date information that is provided. The cost of training an employee will pay for itself ten times over in enhanced insurance fraud detection and reduction of claims losses.
IFTG thus provides a cost effective means to identify and combat insurance fraud through education. Training is easy and convenient with a variety of courses to educate everyone from the beginner to the seasoned professional.These are certified courses in insurance fraud for insurance professionals, especially for those dealing in claims and under-writing. All successful candidates receive a Certificate of Completion from the North American Training Group.
Online students have the convenience of taking courses whenever they want. The program allows users to start and stop without losing their place or data.All insurance staff can access these courses at home or at work. There are no expensive classes to attend and no time off work is required. Validated certifications can be obtained in hours or days, not months and years.
If an insurance company already has insurance fraud training programs in place, NATG offers a professional certification (Insurance Fraud Certified) program. The courses will be an excellent enhancement to the existing training programs. By getting staff insurance fraud certified by an accredited insurance fraud trainer, the company will be able to save major losses in claims, reduce premiums, enhance its market share and provide better quality services to its customers.
These online courses thus offer insurance companies in India an opportunity to deal with the growing menace of insurance fraud, especially health insurance fraud. It is a first step, but a very important step, to combat fraud and reduce losses in claims.
By: Dr. V. Ranjan, Director, Helpmate Services
