Health Insurance Fraud

Types of Health Insurance Frauds

• Deliberate and Opportunity Fraud:

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 and Internal Fraud:

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.

• Policyholder’s Fraud:

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:

• Eligibility Fraud:

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.

• Application Fraud:

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.

• Claim Fraud:

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.

Consequences of Committing a Health Insurance Fraud

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.

How Insurers Are Fighting Medical Insurance Fraud

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.

Conclusion

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.

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