A local IT firm, Siltech Technologies, has launched an Internet-based medical scheme management system aimed at curbing rising cases of fraud in medical insurance.
The system uses biometric identification for authentication of insured patients. It stores online all the bio-data of insured people.
Medical insurers have suffered losses from fraudulent claims by people who use fake insurance cards.
Many medical insurance providers have switched to using smart cards, which are still vulnerable to fraud since the information stored in them and can be manipulated.
Most medical insurance fraud cases involve State corporations, which have the largest membership and beneficiaries using schemes. There are also cases where dependants have sold their cards to third parties leading to rising of fees paid by the insurance schemes to hospitals per month.
According to statistics from the Insurance Regulatory Authority IRA, in 2012 there were 143 reported cases of medical insurance fraud where Sh253.6 million was lost. Only Sh5.2 million was recovered.
“The problem persists because smart cards are expensive and thus a lot of insurance providers shy away. Their cost would take a heavy toll on an industry that is already overburdened by losses through fraud,” Samuel Agutu, the chairperson for Medical Insurance Providers Association said.
Medical insurance is said to be the second largest class of underwriting business in Kenya. Every year the sector undertakes Sh8.9 billion in gross written premiums.
Other than helping hospitals and insurance providers to catch cheats, the scheme limits usage as per the scheme rules since patient information is displayed before delivery of services. This is expected to reduce time taken for reconciliation of billings.
Hospitals and insurance companies will not be charged to use the system but will be required to integrate their existing databases with that of Siltech Technologies. However, they will need to have an Internet connection within their facilities.
Those in areas not covered by the Internet service providers will use an alternative SIM-based connection that involves dialing a short code that the hospital will be given by Siltech.
Siltech expects to make money by serving the 900,000 individuals who have medical covers by charging them an access fee of Sh40 per month.
“Our system is aimed at reducing the rise in medical insurance fraud currently being experienced, by identifying and preventing overpayments before they occur since it provides a real time members status updating platform,” said Ben Waweru, the medical project manager at Siltech.
He added that the system is not supposed to replace what the hospitals and insurance providers have in place but to tighten the security features.
“From our end we will not be able to access the patient data and what we provide to the hospitals and insurance providers is passwords,” he added.
The medical scheme management system works in real time and has alternative backup in case the links to the centralised billing system is not functioning. The alternative, however, is based on a PIN that is generated per transaction.