Important Update (Dated May 30, 2024) – Good news for Health Insurance policyholders! According to the Master Circular on Health Insurance Business 29052024 rolled out on May 29, 2024 by IRDAI, insurers are to decide on the request for cashless claims within 1 hour of receiving the request. Also, the final claim is to be granted within 3 hours after the policyholder’s discharge from the hospital. Insurers have been directed by IRDAI to establish necessary systems and procedures for this process by July 31, 2024.
The Master Circular on Health Insurance Business 29052024 circular is available here - https://irdai.gov.in/document-detail?documentId=4942918
Deliberate Fraud refers to the case wherein a policyholder deliberately, or on purpose, makes a claim by showcasing an accident or loss which is covered by the policy in question. Opportunity Fraud refers to a case wherein the policyholder over-exaggerates a genuine claim, or furnishes wrong details pertaining to pre-existing disease, to get the claim approved.
External Fraud refers to a case wherein external parties like the policyholder, medical service providers, beneficiaries, or vendors attempt to dupe the company by making a false claim. Internal Fraud refers to a case wherein the policyholder or the company in question is duped by the manager or the agents.
With increasing awareness and knowledge of the inner workings of insurance policies, policyholders themselves have started reaping benefits from medical insurance scams. Policyholder Frauds can be divided into three categories:
This kind of medical insurance fraud refers to the case wherein the policyholder provides fake information pertaining to his/her pre-existing diseases, employment status, and/or details pertaining to the dependent. It can refer to cases wherein the policyholder submits a claim for a dependent not covered in the policy, or if an employee provides false employment status information to claim benefits, he/she is not eligible for.
This kind of medical insurance fraud refers to the case wherein the policyholder dupes the insurance company by providing information that is false – relating to pre-existing diseases and other vital information.
This kind of medical insurance fraud refers to the case wherein the policyholder files for a claim that he/she is not legally entitled to. These cases often involve ‘fraud rings’ – where the consulting physician, policyholder, and insurer work in collusion. Another case of Claim Fraud can arise when a policyholder purchases multiple health insurance policies and enjoys settlements from all of them.
If you are found guilty of participating in health insurance fraud cases in India, you are liable to face the following consequences:
You can lose all benefits of the policy you have subscribed to.
Your fraudulent claims will be rejected.
You will have to bear the burden of your medical expenses yourself.
You stand to lose the chance to be treated at the range of network hospitals covered by your choice of policy.
You will find it tough to renew health insurance policy, or even purchase a new one.
Here is how medical insurers in India are lobbying to fight against medical insurance fraud:
Establishment of a standard set of guidelines pertaining to organizing clinics and medication for major illnesses and diseases.
Creation of a database of all fraudulent cases, and dissemination of details of the same.
The creation of an ‘Extortion Anticipation Unit’ that will conduct field surveys to verify cases suspected of fraud.
Developing a ‘whistleblower’ policy that will incentivise individuals to report cases of fraud to the insurers.
Medical insurance fraud is a serious offense in India and can make you liable to incur the above-mentioned penalties if caught in this malpractice. Before purchasing a health insurance policy, make sure you read and understand the fine print pertaining to every single clause of the policy so that you do not knowingly/unknowingly commit a medical insurance scam.
To get a better understanding of the range and details of various health insurance plans, visit Finserv MARKETS today.
The various types of Health Insurance Fraud in India include Deliberate and Opportunity Fraud, External and Internal Fraud, and Policyholder’s Fraud.
The three types of Policyholder’s Fraud include – Eligibility Fraud, Application Fraud, and Claim Fraud.
The consequences of committing Health Insurance Fraud include – losing all policy benefits, rejection of fraudulent claims, bearing the burden of medical expenses yourself, losing access to network hospitals and difficulty to renew health insurance, or even purchasing a new one.