The Health insurance sector is growing each day, as many people come forward to avail health insurance plans to meet emergency hospitalization expenses. Insurers have come up with different kinds of insurance plans like cancer insurance, critical illness insurance and so on. Many insurers also cover the medical expenses incurred outside India. But, the health insurance sector in India is still facing huge losses due to a rise in fraudulent activities. The frauds are committed either by the policyholder or by someone related to the policy holder. In this blog, we will discuss the various health insurance frauds taking place in India.
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In case of a deliberate fraud, to get the benefits of the policy, an accident or loss that is covered by the policy is deliberately presented.
In case of opportunity fraud, inaccurate or misleading information is given by policyholders to the insurer. This is done by a policyholder to ensure that they get the underwriting in their favor.
3. External Fraud
External fraud is committed against the insurer. This is usually done by the policyholders, beneficiaries, vendors or medical care.
Internal fraud is usually committed against a policyholder or a company by the employees of the company. This may be committed either by the agents, managers or executives.
Customers today have become smart and can understand rules and features of insurance plans. This has encouraged many people to get involved in frauds to reap benefits from insurance policies. The frauds committed by the policyholders can be classified into, claim fraud, eligibility fraud, and application fraud.
Under this fraud, the policyholder provides false information to the insurer, to be eligible for the policy. The wrong information may be vis-a-vis pre-existing diseases, employment status, dependents and so on. For Instance, the Policyholder may submit a claim for the dependent or relative who is not covered under the policy.
In another case where part-time employees are not covered by the health insurance provided by the company, they submit a claim by generating fake records with any HR, saying he is a full-time employee of the company.
Application fraud is usually committed while the policyholder fills the application for the insurance policy. In this fraud, a policyholder may enter incorrect information regarding the pre-existing diseases, claim or important dates in the application form. For instance: Policyholder may hide the information regarding pre-existing diseases, to enjoy a tension free claim. In some cases, employers may change the joining date of the employees.
The claim fraud arises when the policyholder makes an illegal claim to get benefits from the policy. At present it is the most common fraud faced by the insurance industry and many cases have been reported regarding this fraud. For instance, to get the claim amount, the policyholder may claim that he has met with an accident and it caused him severe injury. In some cases, this fraud is committed by the policyholder and the physicians together. In some cases, this fraud is committed by the hospitals through billing the insurance company for treatment which is not covered by the policy, or for the treatment which has not been given to patients.