Insurance fraud has been known to affect the entire insurance value chain and is now one of the top growing concerns amongst insurers in Kenya.
Although fraud affects all business lines in the insurance sector, it has been increasingly prevalent in the medical class of business and it has been perpetrated in various ways.
Collusion between the policy holders and health service providers, inflated bills from hospitals and clinics, hospitals making patients take unnecessary tests, impersonation or dual membership by policy holders and pharmacy related fraud cases are some of the ways the perpetrators are executing fraudulent activities in the industry.
Some health service providers have been known to apply two tier pricing for their services. This usually happens when a patient who presents their medical card is charged more than a patient who pays in cash for the same service.
The effect of this has been the exhaustion of medical cover benefits before the duration, leaving the insured customer exposed for the remaining period of cover.
In some cases, patients are subjected to unnecessary tests that have nothing to do with the treatment of what they are ailing from so that the health provider can bill the insurer.
The unsuspecting patient undergoes a number of tests and since the patient trusts the doctor, and they don’t have to pay out of pocket, they comply without questioning.
Patients who pay for cash are usually more alert and often ask why the tests need to be done. And in such cases, you find some doctors will order only the specific test.
We also have fraud committed by the insured who allows another individual to access medical services using their credentials.
They collude with the doctor and permit someone else other than the insured to use their medical card in the health facility and for billing at a pharmacy for someone else’s prescription.
Identity theft is also becoming common where the health facility uses the identity of an insured patient and bills for services that were not rendered to them using that patient’s information.
What then is the way forward? At Jubilee Insurance #ticker:JUB we continue to strengthen and tighten our operations by automating our processes and systems that link a specific patient to the claim they have made.
Technology will enable us to monitor and track where services were rendered, how long it took, what was the cost amongst other details and this will make it harder for fraudsters to falsify claims.
We will also monitor the quality of service our customers receive where we have a 360 degree view of the entire process, from when you arrive at the health facility and run your medical card, and the subsequent processes.
This will enable us to give feedback to our providers on their processes to ensure our customers enjoy efficient and seamless services whenever they visit these facilities.
Whether you are covered under a corporate insurance scheme or an individual insurance policy, fraud eventually translates into higher costs, either in premiums at renewal and/or you end up paying for your bills when you exhaust your cover before time.
Our goal is to increase insurance penetration in Kenya from the current 2.7 per cent by making insurance services more affordable and accessible to Kenyans.
Patrick Tumbo is CEO, Jubilee Insurance, Kenya.