Agarwal Colege - Frauds in Medical Insurance

8/11/2019 Agarwal Colege - Frauds in Medical Insurance

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CA RESHMI M. GURNANI

FCA, MCOM, MPHIL PGDBM & SLET.

Asst ProfessorSmt. CHM College


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OutlineIntroduction

Aims and Objectives

Scope and Limitation

Discussion


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1. I ntroduction Medical Insurance is the fastest growing industry in India

But it is badly affected by the menace of fake claims

Fake medical insurance claims have an organized racket

with hospitals, patients ( Policy holders) and even the

policy handlers from the insurer and intermediaries

The number of false claims in the industry is estimated at

around 10-15 per cent of total claims

Health care industry in India is losing approximately Rs

600 - Rs 800 crores on "false claims" every year


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2. Aims and ObjectivesThe aims of the paper are:

To get the knowledge about Medical Insurance Frauds.

To know the mechanism of managing frauds andchallenges involved in it.

To study the role of Government and other regulatory

bodies in this regard.


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3. Scope and Limitations The scope of this study is to examine the theoretical

aspects of the Medical Insurance Frauds and related laws

in Indian perspective as the study is purely based on the

secondary data.

The researcher has attempted to adopt an analytical and

exploratory approach.

In this regard the provisions of law have been dealt withonly so far as was important in understanding the

underlying principles.


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4. DiscussionMeaning and Defini tion of Medical F rauds

Insurance fraud is not defined under the Indian InsuranceAct, IRDA recently quoted the definition provided by the

International Association of Insurance Supervisors (IAIS)

which defines fraud as "an act or omission intended to

gain dishonest or unlawful advantage for a partycommitting the fraud or for other related parties.

In simple parlance, insurance fraud can be defined as: The

act of making a statement known to be false and used to

induce another party to issue a contract or pay a claim.This act must be wilful and deliberate, involve financial

gain, done under false pretences and is illegal.


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4. DiscussionClassification of Frauds

Internal and External

Internal - agents, managers, executives, or other employees

External - medical service providers, policyholders, beneficiaries,medical consumable vendors, etc.

Hard and Soft Fraud

Hard - is a deliberate attempt either to stage an event or anaccident

Soft - when people purposely provide false information in regardto the pre-existing illness

Provider and Consumer

Provider - one of the largest single sources of health care fraud isthe health care providers

Consumer - many policy holders have got involved in healthcarefraudClaim fraud, Application fraud or Eligibility fraud


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4. Discussion

Challenges in Fighting Fraud Public tolerance

Costs and risks of fighting

Elusive and sophisticated criminals

Lax legal enforcement


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4. Discussion

Managing Frauds Insurers Role

Insureds Role

Providers Role

Other measures:

Process improvements or modifications

Tele-underwriting or proposal verification call, Pre-

authorisation, Intimation to insurer or TPA, Explanation ofbenefits, Fraud detection tools and technology,Whistleblower policy (company level) and "Name &shame" guidelines.


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4. Discussion

Managing Frauds (contd.)Industry Intervention

Education, Contracting, Deterrence guidelines,

Benchmarks, Medical protocols and treatment guidelines,Provider billing ID and registration portal, Watch list

creation and maintenance, Fraud investigator training

program and Whistleblower system & rewards (industry

level).


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4. DiscussionManaging Frauds (contd.)

Government or Regulatory Interventions

Regulatory action against licensed bodies, Specific laws

against insurance fraud, Introduction of claw backprovisions, Regulatory requirements for specific anti-

fraud units & capabilities in insurers and Anti-fraud public

messaging.


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Conclusion

Insurance fraud today is more complex and sophisticated,so managing fraud is one of the most challenging and

costly realities, which insurers, government, different

regulatory authorities and society cannot afford to

overlook.There is a need for participation of the honest stakeholders

to jointly address this most burning issue and come up

with something similar to the Health Insurance Portability

& Accountability Act of 1996 (HIPAA) of US, whichestablished health care fraud as a federal criminal offense

with punishment of up to 10 years of prison in addition to

significant financial penalties.


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THANK YOU

Agarwal Colege - Frauds in Medical Insurance

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