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Fraud And Health Insurance Claims

Health insurance is a form of insurance that pays for medical expenses. If you are covered under health insurance, you pay some amount of premium every year to an insurance company and if you have an accident or if you have to undergo an operation or a surgery, the insurance company will pay for the medical expenses. With health insurance providing a world of benefits to people, fraudulent claims are on the rise. Frauds can be committed by anybody. It can be committed by a policyholder, a health insurance company or even its employees. Frauds committed by a policyholder could consist of members that are not eligible, concealment of age, concealment of pre-existing diseases, failure to report any vital information, providing false information regarding self or any other family member, failure in disclosing previously settled or rejected claims, frauds in physician’s prescriptions, false documents, false bills, exaggerated claims, etc.

Frauds by health insurance companies or its employees include preparation of bogus claims by fake physicians, billing for products or services not rendered, exaggerated claims submission, billing prepared for higher level of services, modifications or alterations made in submission of health insurance claims , change in diagnosis of the patient, fake documentation, and fraud committed by the employees of a hospital or any other healthcare product or service provider in order to make a quick buck. Fraudulent and dishonest health insurance claims are a major morale and moral hazard not only for the health insurance industry but even for the entire nation’s economy. Concrete proof as evidence including documentation, statements made by the policyholder and his family members and even neighbors are taken into consideration.
The essential components of fraud include intention to deceive, derive benefits from the health insurance industry, preparation of exaggerated or inflated claims or medical bills and an intention to induce the firm to pay more than it otherwise would. Devising innovative methods and tactics including pressure tactics, favoritism and nepotism form a part of fraud which is a hazard growing by leaps and bounds since the last decade. To establish that a fraud has been committed requires furnishing of relevant proof. An in-depth analysis of the health insurance policyholder’s intention may also be taken into consideration.

It is estimated that the number of false health insurance claims in the industry is approximately 15 per cent of total claims. The report suggests that the healthcare industry in India is losing approximately Rs. 600 to Rs. 800 crores incurred on fraudulent claims annually. Health insurance is a bleeding sector with very high claims ratio. Hence, in order to make health insurance a viable sector, it is essential to concentrate on elimination or minimization of fake claims.

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