Market: Healthcare
As the recession creates an appetite for fraud, there are signs that the health sector is becoming increasingly vulnerable to suspect claims.
Healthcare and rehabilitation fraud is already endemic in the USA, with estimates for the overall annual costs ranging from $60bn (£35.7bn) to $130bn. But the FBI believes this figure could be as high as $300bn and there are fears the UK could soon become prey to similar problems.
Dr Simon Peck from the Health Insurance Counter Fraud Group (HICFG), and head of provider audit and information at AXA PPP Healthcare, estimates that UK healthcare fraud could cost up to £140m. Last year, AXA PPP identified £1.8m-worth of fraudulent healthcare claims. “We don't have the level of organised fraud that they have in the US but it is nonetheless a big problem,” he says.
The HICFG was set up following an investigation by AXA PPP in 2003 that focused on false billing by medical providers, such as hospitals, nurses, physiotherapists and doctors. Peck says the investigation revealed that upcoding, where the medical provider exaggerates the extent of the treatment they are providing, was a favourite ploy.
Although only a small proportion of the medical profession carry out such activities. But these activities do add to premiums.
Meanwhile, the rise of unscrupulous brokers in the private medical insurance (PMI) marketplace is causing problems for insurers. During the conference, Perfect Health's chairman, Andrew Tripp, says that customers were being “consistently misled” when buying PMI.
He blames the complicated menu-based layout of PMI policies, which in some cases could be up to eight pages long, for confusing customers and providing opportunities for fraudsters.
Elsewhere, Tripp points out that fraudulent claimants were taking advantage of PMI insurers by forming bogus businesses to benefit from cheaper group premiums.
Peck warns that, while healthcare fraud has yet to reach the epic proportions of the USA, insurers need to be on their guard. He explains that the HICFG is currently developing a fraud database a fraud database for health insurers to alert insurers about similar cases and raise rates of detection across the UK.