What Is Health Insurance Fraud?
Health insurance Fraud can be explained as a situation where an insured or medical service provider furnishes fraud, false or misleading information to the insurer with the intention to attain unfair benefits from a policy for the policy holder or service providing source.
Such fraud leads to serious losses for the insurance service providers but it could also result in impacting the health insurance advantage for genuine customers. Also, “urban and rural areas” have witnessed more cases of health insurance as compared to those in the metro cities.
The Insurance Fraud, especially in the health insurance sector has witnessed a steep rise in the recent years. An idea about this trend could be derived from the results of a study conducted by consultancy organisation, Ernst & Young in 2018.
According to the report, 56% of life insurers stated an increase of 30% of increase in fraud over the last two years. Whereas 7% of the insurers reported a 50% increase. However, the story is no different for health insurance.
Most common health insurance frauds:
The most common types of frauds are listed below;
- Filing a claim for treatments or services that were never administered.
- Increasing overall cost of hospitalisation by including treatments that were not necessary basis the medical problem.
- Misrepresenting treatments that are not covered as medically necessary.
- Non-disclosure of Pre-Existing Diseases and manufacturing diagnosis reports to justify tests, examinations
The above mentioned are just the common ones, there are numerous types of this illegal action.
How insurers are fighting medical insurance
Health insurers are constantly on the lookout for all possible methods to tackle the menace of frauds. Some of the ways in which insurers try to control frauds are:
Strict regulations and norms with regards to network hospitals and specifically treatments of pre-existing ailments.
Creation of centralised database of all fraudulent cases recorded to arrive at predictive trend lines with respect to service provider and claimant.
A dedicated ‘fraud prevention unit’ that engages in field-investigations to verify suspected cases.
Better due diligence in underwriting policies.
Rating of hospital service providers
Furthermore, Insurers are doing all they can to beat the ill effects of fraud and advancement in technology could help to go a long way in this fight. Legal assistance with proper penal code to punish such criminal activity from the side of government will also help the companies to reduce the number of frauds.
Timely usage of technology, law and proper procedure could help cut down fraud to its roots, which would be highly beneficial for all the stakeholders in long term.