CRIF is actively developing projects to combat healthcare insurance fraud within a number of European countries and whilst in the process of creating an environmental context for these projects has been reviewing the UK market experience.
The UK private healthcare market
The UK has seen increased consumer interest in private healthcare insurance in recent years as more people become dissatisfied with NHS waiting times and experience increasing restrictions on treatment.
The UK private healthcare market is expected to grow by 2.8% per annum to 2025 according to Persistence Market Research. This growth opportunity is attracting new healthcare insurance entrants to the market. It has been suggested that Amazon could soon target the UK in its efforts to disrupt the healthcare insurance market.
Amazon, JP Morgan and Warren Buffett’s Berkshire Hathaway are launching an independent healthcare company for US employees and hope to roll the model out across the entire country and potentially, eventually overseas. Once market disruption is underway then other alternative providers will follow suit.
Existing healthcare insurance providers are responding to the growth opportunity and the threat of new entrants by offering a wide choice of policy options with a range of different prices in order to retain existing customers and attract new customers to increase market share.
Set against this backdrop, as the healthcare insurance market grows so too does the risk of healthcare insurance fraud, with the weakened UK economy creating incentives for criminals.
What are the most common types of fraud?
Healthcare fraud is committed when a dishonest provider or consumer intentionally submits, or causes someone else to submit, false or misleading information which is used to determine the amount of healthcare benefit payable.
Fraud committed by healthcare providers can include:
- billing for services not performed;
- billing for a more expensive service than the one performed;
- misrepresenting procedures performed to obtain payment for non-covered services;
- billing each stage of a procedure as if it were a separate procedure;
- falsifying a patient's diagnosis to justify unnecessary treatment;
- accepting monies ‘kickbacks’ for patient referrals; waiving patient co-pays or deductibles and over-billing the insurer;
- billing a patient more than the co-pay amount for services that were prepaid or already paid in full by the insurer;
- false or unnecessary issue of prescription drugs.
Fraud committed by healthcare consumers can include: claiming for services or medications not received; forging or altering bills or receipts; using someone else's insurance cover or insurance card.
The NHS is also being exploited for financial gain with fraud costing a conservative estimate of £1.25 billion per annum according to the NHS Counter Fraud Authority. It is estimated that prescription and entitlement fraud alone, which is largely attributed to patients and the general public, costs the NHS £217 million each year.
Typical frauds impacting the NHS include:
- False claims and prescription fraud
- Payment diversion fraud
- Procurement fraud
- Professional misrepresentation fraud
- Time sheet fraud.
Fraud trends and cases
Some examples of recent fraud trends and cases in the UK are helpful in depicting the challenges facing the healthcare market and insurance providers.
The market has seen an epidemic of overseas sickness claims with British holidaymakers fraudulently claiming ‘food poisoning’ whilst abroad. The trend has been called the new whiplash, with unscrupulous claims companies turning their attention to overseas sickness claims to avoid the regulation and fee caps they now face related to whiplash claims. The scale of the problem is so great that some European hotels may ban UK visitors from all-inclusive deals going forward.
A healthcare tourism scam using fake European Health Insurance Cards has cost the NHS circa £200m in fraud. These cards give the holder unlimited access to treatment and EU hospitals then claim the cost back from the UK government. The NHS has paid out more than £1 billion over the past decade, an average of £20 for every card issued, whilst the health service has reclaimed just £145 million over the past five years.
Medical professionals can clearly be the victim of fraud or they may be a complicit party or the perpetrator of claims fraud. The Healthcare Professions Tribunal Service (HCPTS) recently banned a physiotherapist from practising after an investigation discovered that 11 sessions of physiotherapy claimed for had been performed over the phone.
A husband and wife team were investigated by IFED and jailed for a decade of health insurance fraud, submitting 245 claims for treatment they claimed to have received at various medical and healthcare centres. The pair were either altering invoices from genuine treatments they had received in order to increase the values and get a larger payout or fabricating many of the claims and invoices.
As the UK healthcare insurance market continues to grow and evolves it is clear that the related fraud risk is both varied and prevalent. Solid counter-fraud strategies and controls will be as fundamental to insurance providers’ success as their business development drives, in order to ensure profitable retention and growth in market share.
