Abuse and fraudulent use of medical insurance has negative monetary effect not just on insurance companies, it impacts businesses and individuals alike. It increases costs of premiums, while reducing benefits for companies and insured individuals. Also individuals may be receiving unproductive medical treatments and taking unnecessary medication, which may increase risk of damage to their health and lead to taking unnecessary time-off from work. Overall this is a problem we all can do without, and reducing medical fraud significantly is not beyond the realms of possibility.
Medical fraud can take many forms. A popular type of fraud is pharmacies providing cosmetics and other non-medicinal products in exchange for prescriptions to policy holders. In this scenario, policy holders get their products, while pharmacies get to keep a commission, which — quite often — they share with the consultant who had issued the false prescription in the first place. Pharmacies have also been found to pay cash to patients to copy their medical cards and use them to make false claims for higher amounts. But the most frequent fraud is false invoicing, for example invoicing for services or medicines which have not been provided or invoicing more than once for the same service. A number of providers are also busy abusing the claims procedure by over-prescribing medicines, conducting unnecessary medical tests and undertaking needless procedures, including surgeries. Contrary to common perception, it is not the policy holders who commit the most fraud, the medical facilities and pharmacies are responsible for the lion’s share.
Medical fraud is a significant issue both around the world and in the UAE. While the exact numbers are difficult to estimate, according to consultants Booz Allen & Hamilton, the GCC region may be losing up to US$1 billion because of medical fraud and abuse.
Leading the fight
Insurance companies are now dedicating both time and money to tackle this growing issue. For example, at Abu Dhabi National Insurance Company (Adnic) we have initiated a major drive against medical fraud, and the rewards are now unmistakable. Within the last two years Adnic has set up a new Medical Audit Unit (MAU), consisting of medical doctors and pharmacists, which works closely with the Special Investigation Unit (SIU) to detect and investigate fraud. Upon detection of fraud the SIU together with the Adnic Legal Department takes up necessary follow-up measures, such as reporting the findings to the authorities, and in Abu Dhabi, it is the Health Authority of Abu Dhabi. In line with its “zero tolerance of fraud” policy Adnic is also considering legal action in a number of cases.
Earlier this year Adnic introduced a Mobile App, the first of its kind in the UAE, which allows all policy holders to view their own and family member’s claims history, available limits, list of network providers and other benefits in a matter of seconds. An important method of detecting fraud is for the policyholders to monitor their claims history and report any suspicious claims to the Adnic Contact Centre as soon as possible.
In addition Adnic has a Whistleblower Hotline accessible easily via its website. The whistle-blower can leave messages either via voicemail, email or by website text. The whistle-blower also has the option to remain anonymous. For obvious reasons the whistle-blower’s message needs to have enough details to enable a proper investigation.
Over the past few years Adnic undertook over 50 fraud investigations. Based on the findings Adnic eliminated a number of providers from its network, recovered substantial amounts and is now in the process of initiating criminal actions against a number of rogue providers. In order to identify potential fraudulent providers the SIU relies on various sources including customer complaints, data analysis, whistle-blower information and market rumours. The MAU undertakes “mystery shopping” exercises regularly, where a patient would seek to obtain false prescription from a physician and/or request non-medicinal items from pharmacies to filter out the rogue providers.
Ideally insurance companies should share fraud related information with one other, as it is in the best interests of all parties, and it will not affect competition in the insurance market in any way. Unfortunately the regulators are generally hesitant to allow this, although a number of countries are now beginning to change their rules. If comprehensive fraud prevention and follow-up measures are undertaken, the consumers will be the ultimate beneficiaries, both financially and also because it will reduce the risk of patients taking pointless medication and wasting time on nonsensical lab tests and surgeries.
I am confident that a clear message is now being sent to the market by the medical insurance sector. The insurance companies are on a war path with rogue providers, and the days of their fraudulent practices are numbered.
The writer works for Special Investigation Unit at Abu Dhabi National Insurance Company (Adnic).
