The rise of UAE health insurance fraud

Health insurance is big business. Want the numbers? Written premiums throughout the United Arab Emirates currently total just over $9bn and with the introduction of compulsory health insurance for expatriates in Dubai (95 per cent of the workforce) that figure is only set to rise.

But there is another factor at play when it comes to rising insurance premiums – fraud.

Of course, insurance fraud is nothing new, but the levels at which it is currently thought to be taking place on a global level are shocking. Figures from the Health Insurance Counter Fraud Group, a United Kingdom group consisting of 32 health insurance companies with the mandate of detecting and preventing fraud within healthcare, suggest worldwide losses as a result of fraudulent claims are in the hundreds of billions of dollars.

Perhaps it should come as no surprise that the United States leads the way. Fraudulent claims are thought to cost its government up to $175bn and losses across the European Union range from $40bn to $132bn a year.

The figures for the Gulf are not quite as clear-cut. But a recent report by an American management consultancy put losses as a result of medical fraud in the region at about $1bn a year. Another indicator of the size of the problem in the UAE comes from a recent survey. It found that one-third of Emirati participants had been advised to undergo unnecessary medical tests or procedures in order to inflate medical bills. Over half also claimed to be aware of colleagues obtaining fake medical certificates in order to take fraudulent sick leave.

One possible reason for the levels of fraud (or attempted fraud) both in the UAE and beyond is that many see it as a victimless crime. Or at least it is easy, perhaps, to turn a blind eye to the negative effects it has.

But make no mistake; the effects are very serious. Here we are not just talking about the financial losses of fraud, but also the potential to put patients at risk of unnecessary procedures. And then of course there is the increasing cost of premiums for honest customers – which no doubt the majority of us are.

We also need to remember that health insurance fraud impacts a provider’s ability to deal with genuine claims in a timely manner. They need to walk the line of ensuring the authenticity of the claim while ensuring customers do not suffer from any delays in receiving pay-outs.

What does health insurance fraud look like?

Another factor behind the seemingly out-of-control issue of health insurance fraud is that many businesses – and their employees – do not really know what it looks like in action. The truth is health insurance fraud can take many guises and is often notoriously difficult to spot. Some of the most common types of health insurance fraud committed throughout the UAE include:

Billing for more expensive treatments than required: Otherwise known as ‘upcoding’, this involves exaggerating a diagnosis to a more serious condition in order to increase a claim.

Falsifying diagnosis: Essentially going down a moot avenue of diagnosis in order to charge for procedures that are not medically necessary.

Billing for services not performed: This can be achieved by falsifying claims using genuine patient information, either from scratch or by padding out genuine claims with procedures that did not take place.

Misrepresenting non-essential treatments: This is the act of claiming for a non-essential procedure, for example a nose job, by representing it as a medically necessary treatment such as septum repair.

Procedures for pay: This is perhaps the most brazen form of health insurance fraud, whereby medical professionals carry out medical treatments on healthy patients solely for the purposes of making a claim.

Most fraudulent claims can be split into two categories: hard and soft. Soft insurance fraud is generally more opportunist and far more common. This occurs when there is a genuine medical complaint, but it is beefed up for the purposes of a claim.

Hard fraud on the other hand, while less common, has the potential to be more financially damaging. Hard insurance fraud takes planning. It not only involves claims for procedures that do not actually take place, but – believe it or not – can also include claims from health centres that do not even exist.

In both cases, there is a clear need for businesses to work with their employees to ensure their health benefit system is robust enough to bring to light occurrences of fraud, ideally at the application stage. Not only will this help cut down on bogus claims and help to minimise the cost of fraud to insurers – it has the ultimate consequence of reducing premiums for all.

How can it be stopped?

A level of fraud is to be expected in any healthcare system, but with 200,000 false claims estimated to be made each year – amounting to billions of dollars – the UAE has been singled out by several experts as a cause for concern.

The cost of these fraudulent claims to businesses in the region is substantial and so it is vital that organisations work with trusted healthcare providers and ensure their employees understand their health benefits.

Equally, employees should be reminded to protect their health benefit information in order to prevent health identity theft. Businesses must also educate their workforce to be suspicious of any ‘free’ medical services that are offered to them that require health insurance information and question any treatment that they feel is unnecessary or excessive.

Businesses can also consider a preauthorisation system – which generally prove highly effective in reducing fraud. This requires employees to obtain authorisation from the benefit provider that any health care service, treatment, procedure or prescription drug (or certain types or categories of any of these) is medically necessary and therefore covered by medical insurance.

The above are just a few ways in which health fraud can be brought to a reasonable level of control. The bottom line is that the problem is very real here in the UAE – with 5 per cent of all paid claims thought to be the result of fraud. Ultimately, these figures can no longer be considered collateral damage. It is your business that ends up footing the bill through higher premiums.

Stephen MacLaren is head of regional sales employee benefits at Al Futtaim Willis