1. Broker Fraud
An insurer obtained a new corporate client. The brokerage deliberately understated the risk on the policies and as a result the insurer grossly under priced the policies. The risk the broker exposed the insurer to exceeded £100k.
It was later discovered that the broker had done this with 20 large corporate clients placing the policies with numerous insurers.
Investigators were alerted and investigations revealed that the incentive behind the under stating of these large corporate policies was to build a portfolio of seemingly valuable business. They then sold that business to an unsuspecting reputable broker firm.
Investigations identified that the entire portfolio of business was fraudulent. False signatures were also identified on a number of policies.
The fraud created victims of 20 corporate health insurance policy holders, numerous insurers and the unsuspecting broker.
Civil legal action is pending and the matter is currently being investigated by police.
2. Surgeon - Unbundling
A surgeon submitted an invoice for an operation on a privately insured patient’s knee.
The invoice identified a number of coding issues and the insurer suspected unbundling.
Investigators were given consent by the member to obtain the recording from the arthroscopic camera in which it was revealed that the procedure performed was not reflective in the bill submitted.
As a result the bill was found to be incorrect. The deceptive portion of the bill was rejected and the matter reported to the professional body.
3. Health Insurance Member - Fertility Treatment
A private medical insurance member contacted her insurer requesting authorisation to see a consultant gynaecologist stating she was trying to conceive.
She was informed during by the health insurer that private health cover is not provided for fertility consultations/investigations due to it being a general scheme exclusion. The member was unhappy with this response.
The health insurance member contacted the insurer a week later, stating that she was confused when she phoned initially. She advised that she is having a laparoscopy for dyspareunia. The insurer requested a medical report from the members consultant.
The medical report was received from the consultant gynaecologist, with a diagnosis of endometriosis. The consultant further reported that the laparoscopy was required to treat endometriosis. There was no mention of treatment for dyspareunia.
An investigation commenced and the member was contacted. The member explained that her reasons for wanting private health cover was primarily for fertility reasons, but had also wanted to treat dyspaneuria and possible endometriosis. Member admitted she was confused why the GP had suggested she had endometriosis because it had not been diagnosed before.
Further medical records were requested from the consultant gynaecologist and other fertility specialists that the member had consulted.
The consultant's referral letter contained multiple references to 'fertility, referral to fertility clinics and trying to conceive' over the last 18 months.
A second referral letter from a fertility specialist which stated that the reason for the treatment was for fertility and that if private insurance rejected it then the patient would have to fund the treatment themselves.
Investigative review found no corroborating evidence that member suffered from dyspareunia, or endometriosis, or required a laparoscopy to treat either condition.
Prima facie evidence showed that the primary reason for seeking cover was for fertility purposes, as confirmed by the member, and that the additional diagnosis and treatment sought was a disguise for fertility treatment.
The claim was rejected and the member’s policy reviewed.
4. Health Insurance Member - Non disclosure
A privately insured member claimed for treatment to his shoulder two days after obtaining a policy. The member was on a full medical underwriting (FMU) policy.
An Initial request for the members medical history did not identify a pre existing injury and the insurer commenced to fund the treatment. The members GP confirmed in a report that the condition was new.
Three months after the initial claim an anonymous caller contacted the insurer and reported that they were aware the medical insurance members injury was pre existing.
The matter was referred to fraud investigators who interviewed the physiotherapist. The physiotherapist informed investigators that the injury was pre existing.
Investigators interviewed the health insurance member who admitted the fraud.
The member repaid the £1800 of funding that the insurer had paid, their policy was cancelled and they were reported to the HICFG.
Policyholder X
Policyholder X submitted numerous cash-plan claims, over a short period of time, for various treatments.
Regular reporting lead to a review of these claims and it was found that 15 of these treatments did not take place – this was confirmed by contacting the treatment providers.
Further investigation revealed that Policyholder X had taken out 2 further policies with the same company using aliases.
Under the S29(3), (anti-fraud), provisions of the Data Protection Act 1998, details of Policyholder X were shared with other HICFG members who found that the same thing had happened to them.
All policies were cancelled and the police contacted. Policyholder X was convicted in a criminal court, which resulted in them receiving community service and being ordered to compensate for the monies fraudulently gained.
Provider W
Provider W was treating patients of most of the major Private Medical Insurance companies.
He would typically charge for performing an MRI scan which attracts a fee of several hundred pounds. His invoicing triggered ‘alerts’ across several insurers, and further investigations were separately undertaken.
The HICFG members then shared intelligence on the provider.
It transpired that he did not own the equipment to carry out such scans, he used aliases, and was widely believed to be billing for other treatment that he had not infact provided.
The HICFG combined their evidence which demonstrated the misrepresentations were extensive, and therefore not likely to be ‘one-off errors’. Substantial financial recoveries were made, he was formally reported to the police, and eventually as a result of independent complaints by HICFG members to his professional body, he was removed from their register.
Provider X
Most of the Private Medical Insurance companies publish their own ‘Fee Schedules’, which use Industry standard coding to list almost all commonly performed medical procedures.
In many areas of practice there are number of possible codes which can be selected based on the complexity of a procedure actually performed. By falsely using a code for a more complex version of an operation it is possible to obtain higher reimbursement than was intended. This is hard to detect as the difference may be quite technical and the operation would be consistent with the customer’s condition and medical history. One such are is gastroscopy (endoscopic examination of the stomach) where it is possible to perform a diagnostic procedure (just a look) or a therapeutic procedure which is where a treatment is given as well.
Most of the insurers try to identify upcoding.
Several HICFG members observed that Provider X appeared to be invoicing vastly more therapeutic procedures than his peers, and more than would statistically be expected. His patients medical notes did not document the therapeutic procedures which were claimed.
Despite several warnings the incorrect billing continued and eventually several HICFG members complained to the General Medical Council, (GMC). After a full investigation and Panel hearing, the provider was suspended from the register for a period of 12 months. Many insurers also received refunds from the provider concerned.
Dr T
A Mr M took out a medical insurance policy and within a few weeks made a claim for cancer treatment. The insurer was suspicious that the condition was known about when the policy was taken out and asked for a GP report. The GP report stated that the condition arose after the policy commenced. However the insurers suspicions remained and further enquiries were made. It was discovered that the GP was infact already monitoring the condition and had been doing so for several months before the policy inception. The insurer issued a notice of legal proceedings against the GP who made an out of court settlement without admission of liability which covered the entire cost of the medical treatment.
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