Times of India
13 July 2010
By Manthan K Mehta
Mumbai, India

Insurance companies, which are bleeding because of what they claim are inflated claims, have been relying on special investigating agencies to verify the authenticity of several of these claims.

Aditi Kamath of Escalate Consultants Services, which specialises in investigation of fraud claims, said, “Services of super–speciality consultants, auditors and medicolegal experts are now taken to go into the depth of the matter. The work profile includes verifying diseases, documents, medical reports and providing clinical judgement on matters deemed suspicious.”

“Besides hospitals, many of the inflated claims are also made by patients who are hand–in–glove with medical professionals and, sometimes, third–party administrators (TPAs),” another consultant said. “Insurance firms are suspicious of some TPAs whose investigations they feel are not credible,” he said.

But there are only a handful of specialised agencies carrying out investigations on behalf of public– and private–sector insurance companies in Mumbai. Insurance firms pay anything between Rs 8 crore and Rs 10 crore annually and industry experts say business is likely to grow because of the rising number of referrals.

Approximately 400 cases for spot investigation and 25 cases for detailed investigation are referred by insurance firms or TPAs to these investigating agencies in Mumbai a day. “In spot investigation cases, our role is to merely verify the identity of the patient, class of accommodation, ailment and justification for hospitalisation,” Kamath said.

Instech Advisory Services vicepresident Bhusan Patil said, “Some firms also ask us to carry out detailed investigation. Specialised doctors’ help is to taken to inquire into the whole gamut of treatment, including whether the patient had any pre–existing ailment, excess medical bills by hospitals, nature of ailment, authenticity of medical reports and justification for the treatment.”

More challenging is the task of investigating personal accidents claim for disability calculation. Kamath said, “We have orthopaedics, who worked as civil surgeons, to evaluate the disability percentage in claims under personal accident policy. It is a specialised task, which involves examining patients as well as making discreet enquiries with neighbours, employers and relatives to determine the disability’s magnitude.”

On why insurance firms were placing claims under the microscope, another industry insider said: “Thirty per cent of the cases are found to be doubtful in spot investigations. And patients are found to never have been hospitalised in 5% of the cases. Sometimes, policy holders have never been hospitalised, but have claimed insurance benefit by submitting forged documents; in some cases, the actual patient is found to be the claimant’s relative or friend. Some hospitals have lodged claims in the name of policyholders who never underwent any treatment. Sometimes, hospitals too have used fake policies.” Patil said: “It is a highrisk job and many of our team members have been threatened by hospital staff who committed the fraud.”

Expert opinion: why it matters

• Mediclaim policy came into existence in 1984
• In 2000, cashless mediclaim was introduced
• TPAs also came into existence the same year
• Since April 2008, insurance compa nies started appointing investigating agencies to verify claims
• 400 cases of spot investigation are referred daily
• Insurance firms refer 25 cases in a day for detailed investigations
• Investigating firms charge Rs 3,500 to Rs 4,500 for a case of death or a disability claim
• Rs 1,500 to Rs 2,500 is charged for detailed investigations
• Rs 250 is charged for spot investigation
• Investigating agencies prove 30–35% cases to be fraudulent