03 Jul Health Care Insurance Fraud In Kenya Uncovered
A dramatic rise in health insurance fraud cases is a main source of concern for health insurance providers in Kenya.
The Insurance Regulatory Authority (IRA) fourth quarter report for 2015 showed that insurance companies lost Ksh 367 Million up from Ksh 103 Million in 2014, to fraud.
Health insurance ranked third as the insurance class with the highest volume of fraud. Rising fraud will complicate access to insurance for the ordinary Kenyans as insurance companies will seek ways of factoring in the cost of fraud in insurance premiums.
Fraudulent Practices – Health Insurance Sector Kenya
IRA’ s Insurance Fraud Investigation Unit (IFIU) reported that health insurance fraud takes place primarily via fraudulent claims. Here are some of the fraudulent practices in the Kenyan health insurance sector
Two Tier Pricing
Some hospitals will charge you more for services if you present an insurer’s card as opposed to if you pay in cash. This practice may not be illegal, but it naturally leads to a disadvantage for health insurance providers and their clients.
It means that clients are put in situations where they can exhaust their covers very easily. In pure business terms, why should you pay more for a service compared to others accessing the same service?
Two-tier pricing is also used in some pharmacies and specialist laboratories that accept health insurance cards.
Similarly some pharmacies opt to give patients drugs options based on the highest margin they can get. In many cases, several medicine brand will meet the prescription provided.
It is easy to see how a pharmacist may opt for higher end drugs and charge at the highest possible price point because the insurance company is not there to negotiate the price.
Some hospitals also commit fraud by commissioning frivolous tests to unsuspecting patients. Once a doctor orders a test, many patients usually don’t ask questions regarding the tests ordered.
In many cases, the patients simply go along. Paying patients tend to be more assertive to inquire about the necessity of tests. Insured patients on the other hand tend not to ask questions because the insurance company will pick the tab anyway.
Some medical facilities take advantage of this and order unnecessary tests as a way of inflating the reimbursements they will receive from insurers.
Impersonation happens when someone else, other than the insured person, accesses medical services using the credentials of the insured person.
Another form of impersonation is where an insured person presents his card for billing in a pharmacy on a prescription written for someone else.
In both cases, the person who receives services and care is not the insured person. This type of impersonation is illegal and can land someone in jail.
Outside of provider networks fraud is also committed by people who make fake cards, and write prescriptions, sometimes in concert with pharmacists to access expensive drugs for resale.
This type of fraud may also be committed by a cardholder in cahoots with pharmacists. A fake prescription is prepared and presented to a pharmacist, who then fills the prescription, and bills the medical insurance provider.
In all these cases, the main loser is the patient because fraudulent claims affect the cost of insurance. Insurance providers may make losses in the short term, but they will end up raising the cost of health insurance premiums to protect their margins.