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Health insurance industry steps up anti-fraud measures

▪ Norwich Union Healthcare to work with KPMG to target overcharging

November 2008 News

The health insurance industry is stepping up efforts to stamp out fraud and mischarging carried out by healthcare providers, hospitals and doctors.

As revealed by Health Insurance earlier this year, an industry body has been set up by private medical insurance (PMI) providers to tackle the problem and this month it will hold its first conference to discuss the issue.

Norwich Union Healthcare, meanwhile, is setting up its own specialist programme with advisory firm KPMG to target fraud.

Insurers claim fraud and mischarging costs them millions of pounds each year, although only a minority of healthcare professionals are thought to knowingly overcharge them. There have been a number of high profile cases over the past two years in which insurers have successfully recovered substantial amounts from doctors who they say have overcharged them. However, doctors’ representatives claim that some insurers’ billing systems are confusing and can lead to them being mischarged. Insurers, though, argue that the problem means corporate and consumer policyholders suffer unfairly as much of the additional cost has to be passed on to them.

The Health Insurance Counter Fraud Group has developed a new web-based intelligence system which will include a database of dubious practices carried out by doctors and hospitals but also of fraudulent customers, fraudulent insurance brokers and fraudulent employees. Although it is highly unlikely that intermediaries would be involved in health insurance fraud – they do not get involved in the billing process for a start – it is important that they are aware that the problem exists and is being addressed by providers, according to Counter Fraud Group spokesman Dr Simon Peck, head of provider information and audit at AXA PPP healthcare.

He said: “Brokers are within the remit of the group, but it would be extremely unlikely for them to be directly involved in fraud. It is far more likely that they could be caught up in it unwittingly, as they might find themselves acting in good faith as an advocate of a customer who was committing fraud without their knowledge. Brokers should be aware, too, that the industry is working hard to stamp out fraud as it simply leads to higher costs for policyholders.”

A website has also been developed (www.hifc.co.uk) containing information about the group and its work as well as a telephone number for the public to report suspected fraud, on an anonymous and confidential basis if they wish.

In addition to PMI providers, the Health Insurance Counter Fraud Group also includes non-member attendees from the City of London Police, the Association of British Insurers and the NHS Counter-Fraud Service.

Next year, healthcare fraud experts from partner organisations in the US, Canada, South Africa, Australia and Europe will be invited to an international symposium with the aim of taking the best practices from around the world and implementing them in the UK.

Meanwhile, Norwich Union Healthcare – itself a member of the Counter Fraud Group – has also set up its own initiative with KPMG to use “proven techniques”, applied in the NHS and internationally, that measure the total cost of fraud by hospitals, doctors and other providers of healthcare.

Simon Arnold, director of healthcare – customer, Norwich Union Healthcare, said the provider is “determined” that policyholders’ funds should not be lost to fraud and error by a “minority” of healthcare providers.

Jim Gee, director of fraud services at KPMG, will spearhead the Norwich Union Healthcare anti-fraud drive. Gee previously helped the NHS recover £800m in fraudulent claims as head of the NHS counter-fraud service.