On a recent trip to a local clinic, seeking treatment for a summer flu and upset stomach, I was put on a drip, given a number of blood tests, an ear waxing treatment and returned home laden with four different types of drugs.
“Do you want anything stronger?” the doctor asked as I left. I politely declined.
Upon telling my story to a neighbour, she recounted how a dentist had asked her if she only wanted the standard clean, or wanted to use up the maximum cover on her insurance to go for something else. Seventeen fillings later and my neighbour looks like she has joined the new celebrity trend and got herself a fashionable grill.
This a la carte approach to healthcare may seem innocent enough, but the bill ultimately has to be paid somewhere down the line. At a time when competition among insurance providers is increasing and margins are being squeezed, the industry is calling for a clampdown on systemic abuse and more regulation of claims that are clearly fraudulent in nature.
The zeros certainly begin to add up. Figures quoted by the Health Insurance Counter Fraud Group (HICFG) show that fraudulent medical insurance claims cost the US government up to $175bn a year, while cash-strapped providers in Europe are being hit with a bill of anywhere between $40bn and $132bn a year.
In the Gulf, statistics are difficult to come by, but a report by consultancy group Booz Allen Hamilton estimated that the UAE was losing more than AED3.67bn ($1bn) on health insurance abuse or fraud.
The results of a survey published earlier this year by 999 magazine — the official English-language monthly of the UAE Ministry of Interior — found that 28 percent of the 450 participants surveyed said they have been advised to undergo unnecessary tests or procedures that were clearly designed to simply inflate the bill the provider would submit to the insurance company.
Around half of those surveyed also said they knew someone who had submitted a fake sick note. In most cases, not only is the industry being hit, but productivity is also affected. Earlier this summer, official figures from Kuwait’s Civil Service Commission found that public-sector employees claimed more than 120,000 sick days during the holy month of Ramadan and in the four days immediately after the Eid Al Fitr holiday, leaving the Gulf state with a bill of over $11m in lost productivity.
Kuwait is already struggling to clamp down on the number of sick days claimed by its more than 435,000 government employees and despite a new database being put in place to monitor sick notes, and those claiming them, there have been allegations of employees taking sick days illegally or having them signed off by unscrupulous medical doctors.
In the UAE, healthcare is big business and the industry is projected to grow from $3.2bn at present to $11.9bn by 2015.
“The market in the UAE is quite competitive. There is a high number of operators and the competition is still based very much on price. All the clients are becoming more and more aware of quality and focus on quality for employees,” says Michael Bitzer, CEO of Daman, the country’s largest health insurer with over 2.4 million subscribers.
Daman’s team of 25 investigators process just under 200,000 false claims annually, but Bitzer says the line between outright fraud and simple abuse is hard to define.
“There is a thin line between abuse and fraud,” he says. “It’s happening all over the world. In hospitals they try to maximise their profit and it is difficult to define what is abuse, what is the legal maximisation of revenues and what is fraud.
“We have certain guidelines in place to define what tests you should do in certain conditions but medicine is very broad and you cannot define for every diagnosis and every guideline. We try to apply reasonable medical judgment for the individual claim.
“What we do is a trend analysis and compare one provider with another and if one provider prescribes in 100 percent of cases and another only in 50 percent then you go back to the first provider and discuss a little bit of about his behaviour. For me this is abuse, this is not fraud.
“Fraud takes place if a provider puts in for a bill that definitely was not done or for a patient that does not exist, or if a provider fakes a prescription and the pharmacy does not distribute the medication; that for me is criminal fraud and there are cases.”
Daman has not been shy about uncovering outright fraud and undertaking prosecutions.
“At the beginning of compulsory health insurance there was a trend of providers, not many, to maximise revenues even with fraud but we were able to detect this fraud to terminate contracts and even went to a public prosecutor. So real fraud is at an extremely low percentage,” he says.
Figures from 2012 show Daman had 1,401 medical providers in its network in the UAE, with 453,318 worldwide. It processed around 1.53 million claims every month. With just 25 employees in its fraud investigation department, the statistics are against them.
In the UAE, the emirate of Abu Dhabi has had compulsory medical insurance for all employees since 2008 and 95 percent of the labour force is currently covered. Dubai has not formally introduced blanket compulsory cover, but is expected to do so in the near future. As a result, some experts think medical fraud is likely to be more prevalent in Dubai at present and say that clamping down on this is a big issue for authorities and the industry.
“Sometimes people are kept longer than necessary in a hospital or an intensive-care unit. These kinds of things are daily issues that insurance members face and they need to be protected,” Dr Haider Saeed Al Yousuf, director of the Dubai Health Authority, was quoted as saying in a report by The Telegraph newspaper.
In some cases, this includes minor offences like prescribing unwanted medication or ordering expensive but unnecessary procedures, such as MRI scans.
Insurance provider Aviva, which is based in the UK and operates in the Gulf, says the issue of medical insurance fraud is growing in the region and it has already noticed some problems that are specific to Dubai.
A spokesperson says the delay in introducing compulsory health cover in Dubai has meant that there is an ongoing issue where multiple low-paid workers who may not have cover have been known to use one healthcare insurance card. This is also often the case because some providers do not place photos on ID card, leaving them open to misuse.
“The fact [that] multiple people [are] using the same card is not new. It is a problem in markets where insurance penetration is low,” says Bitzer. “We have this problem, but how do you solve it? I doubt the picture will solve it.
“You make it compulsory to check the ID but even if they check the ID and picture, it is done at the reception and you don’t know who is going for the treatment. You may show your passport and then you send your brother for the treatment.
“Or the provider says ‘I don’t care as long as I have a card that I can bill'. The picture can reduce the problem but it can’t solve the problem. If there is criminal intent there is always a way.”
Insurance firm InterGlobal, which has offices in the UK, Asia and across the Gulf, has also highlighted this issue. The company says its investigation teams pick up on fraudulent claims on a daily basis, and cites one instance in which multiple claims were being submitted by a criminal gang over a number of years from a false medical provider, which they dubbed “just a telephone in the desert”.
“A lot of insurers were caught out. We got on to the case and we’re only very lightly affected,” Paul Weigall, InterGlobal’s sales and marketing director, was quoted as saying in The Telegraph. “We are very active on the fraud investigation front. We encourage our customers, our hospitals and everyone else involved to report to us if they feel something is not correct.”
InterGlobal was invited to comment further on its internal investigations in Dubai, but declined at the last minute, perhaps stung by feedback to its criticism in The Telegraph article. Its apparent onset of shyness could also be down to the fact that Arabian Business has learned Dubai is getting ready to introduce a regulatory body to oversee the industry and help clamp down on the growing problem of fraudulent claims in the healthcare sector.
Sources with knowledge of Dubai’s plans predict a formal announcement could be just months away and will help pave the way for the introduction of its own compulsory healthcare legislation. However, exact details of the new body and what powers it will have are still unknown.
There are, of course, already some initiatives in place. Provider Axa Insurance Gulf helped in the establishment of the Gulf Healthcare and Anti-Fraud Association (GHAFA) and nearly a dozen Middle East and North African insurance providers are part of the Global Health Fraud Hub, which is in partnership with HICFG, GHAFA and the European Healthcare Fraud and Corruption Network.
For an insight into the correlation between premium rates and medical insurance fraud, we only have to look to recent news from Saudi Arabia. Khaldoun Barakat, former chairman of the Jeddah Chamber of Commerce insurance committee, estimates premiums in the kingdom could rise by as much as ten percent as providers battle with the ongoing problem of fake claims and falling profits.
“Misuse of the insurance policy has caused significant losses to companies during the last period,” Salah Aljabr, chairman of the insurance committee at the Chamber of Commerce in the Eastern Province was quoted as saying in a report by Saudi daily Arab News.
In the UAE there are also calls for action, especially as the Emirates Insurance Association estimates around five percent of paid claims are a result of abuse or fraud.
At the same time, the Ministry of Interior reports that while the misuse of health insurance coverage — including over-prescription for medicines and unnecessary tests — are pushing up the costs of insurance premiums in the UAE by nearly 20 percent, average premiums are still low. As a result, Aviva’s spokesperson warns margins are being squeezed and some operators may soon find the market unprofitable and decide to exit altogether.
“In Abu Dhabi we are currently relatively satisfied [with the level of legislation] and we can solve most of our problems in the current environment and we have a regulator,” says Bitzer.
“In Dubai, I cannot judge it now... we have to wait until they publish the detailed regulations. But I am convinced that, based on the previous discussions with Dubai authorities, that if they do come up with a new law they will take into account all these issues as they have their own extra time to learn from the experience of Abu Dhabi... So I am relatively optimistic we will get an excellent law in Dubai.”
So the next time a doctor asks you if you want something stronger, or urges you to get another denture, remember it all adds up to big money at the end of the day. Someone, ultimately, has to pay.