Life & Health – Medical Fraud: Who foots the bills for abuse?

It is an unhealthy trend that medical insurance abuse and fraud are on the rise in the UAE. It is estimated that around 200,000 false claims could be made in a year, amounting to billions of dollars in wasted medical aid.

Estimates by Willis Towers Watson (WTW) suggest that between 5% and 30% of all claims are fraudulent. That, in real terms, amounts to a minimum of $1 billion in the UAE. The local medical market has become somewhat of a minefield where insureds, when visiting local clinics or hospitals with common ailments, are inevitably prescribed unnecessary drugs, antibiotics, tests and scans.

The most common types of fraud within the UAE insurance industry can be split into two: abuse and overuse.

Abuse is often long in the planning, and can include claims for procedures that do not ever take place, or it can be in the form of claims from non-existent health facilities.

Overuse is considered more opportunistic, but far more prevalent. This is where claims for a genuine medical complaint are taken advantage of to make the value of the claim higher for the facility, such as:

•  Raising a diagnosis to a more serious condition, resulting in an increased claim amount;
• Making false claims based on genuine information from a patient, such as making claims for services or procedures that did not occur;
• Offering a completely false diagnosis which will lead to an inflated claim.

These widespread practices have contributed to medical inflation in the region, pushing premiums up by a minimum of 20-30% over a five-year period. This is unsustainable.

Return on investments in fraud and abuse detection range between 1:1.5 and 1:7. Using the latter ratio means that for every dirham spent on fighting fraud, seven dirhams could be saved.

You are paying the price!

Fraud and abuse wear different masks, and are often considered by the perpetrators as a victimless crime. A survey in the UAE revealed a third of all participants were advised to undergo unnecessary medical tests to inflate medical bills. The same survey revealed around 60% who responded claimed to know of at least one work colleague who had obtained fake medical certificates to take fraudulent sick leave.

Another alarming statistic comes from the US where the misuse of claims is believed to have contributed to around 250,000 deaths due to medical malpractice, 500,000 deaths due to prescription drugs and 30 million prescriptions are dispensed improperly. This trend is likely to be mirrored in the UAE and could be worse.

On the financial front, a WTW survey cited Dubai Health Authority estimates that 10% is added to the medical premiums due to medical overprescription. The increase in premiums is absorbed by employers, which reduces the bottom line of companies.

 The abuse of claims is believed to have contributed to around 250,000 deaths in the US due to medical malpractice, 500,000

deaths due to prescription drugs and 30 million prescriptions are dispensed improperly. This trend is likely to be mirrored in the UAE and could be worse.

 For every year that your company insurance policy performs badly (i.e., unprofitable to the insurer), you can almost guarantee that your benefits will be affected the following year at policy renewal.

So just when you need insurance most, you may realise that the insurance was downgraded. This impacts the patients who need medical insurance the most.

Another issue that is rarely discussed is that inflated medical claims will leave the claimant uninsurable in the following years. Insurers can deny life or medical insurance claims if they can prove that the claimant had hidden medical ailments from them at the point of application.

The impacts are far-reaching. Not only does abuse and fraud impact the scope of benefits your company is offering you, it might affect your ability to get an individual or family insurance at a later stage.

You can make a difference!

Here are some do’s to help make a difference:

• Do understand what is covered under your medical insurance policy and stick to it;
• Do visit a GP (Family Doctor) first instead of going straight to specialists;
• Do question the lab and radiology tests referred to you;
• Do research the risks of medicine prescribed, and question the need for it, especially if you suffer from more than one medical condition;
• Do ask for generic drugs as opposed to branded ones since generic drugs are substantially cheaper than the more expensive branded ones, but just as effective;
• Do report any fraud or abuse you come to know about;
• Do not sign on empty or incomplete claim forms;
• Do not sign on more than one claim form per doctor visit;
• Do inform your insurer of services not undertaken or completed after the insurer’s pre-authorisation;
• Do alert your insurer if a provider offers to waive your co-payment or deductible;
• Do alert your insurer if a provider offers to bill the insurer for an uncovered service;
• Be aware of “free” offers. These are often fraudulent schemes to obtain your personal information or to bill insurers for treatments not rendered;
• Do ask questions and get answers. You have the right to know every detail about your illness and the treatment prescribed for it and alternative treatments that could be considered before a major procedure is suggested;
• Be informed about the healthcare services you receive and keep good records of your medical care;
• Review your Explanation of Benefits (EOB) when you receive it. Inform your insurer if you notice inflated, false or duplicate billing;
• Do consider utilising clinics instead of hospitals for out-patient treatments. Doctors at clinics are not as incentivised to prescribe unnecessary lab and radiology tests;
• Never rush into a surgery. Seek a second medical opinion from a renowned specialist before you accept to go for surgery.

Be vigilant

A multi-level approach to fraud and abuse is needed from all stakeholders in the market. Fraud in medical claims is not just a figure or an interesting statistic that we read about; it affects your lives and the lives of your loved ones.

Be vigilant, know your rights and spread the awareness to make a difference in someone else’s life.

Author: Carole Khalife | Originally published in the Middle East Insurance Review

Al Futtaim Willis is a commercial insurance broker and consultant operating within the UAE since 1976. Across geographies, industries and specialisms, Al Futtaim Willis provides its local and multinational clients with resilience for a risky world. For more information please call +971 4 376 0200 or click here.