Health insurance claims under the government's Bhamashah Swashthya Bima Yojana in the northwestern province of Rajasthan have soared dramatically.
The claims shot up from INR75 million in the first week starting on 13 December 2017—to INR203 million in the 17th week (until mid April), resulting in the current claims ratio of around 70%, reports The Financial Express. This was despite the fact that the premium charged rose 3.4 times since last year. Based on current trends, the ratio for the full year could be as high as 120%. In 2015-16, the first year of the scheme, the claims ratio was 90% — claims of INR3.2 billion were made against a premium revenue of INR3.57 billion.
The central government’s National Health Protection Scheme (NHPS), likely to be rolled out soon, is based on the Bhamashah model.
What is probably at the heart of the problem is the rising incidence of fraudulent claims that New India Assurance, the designated insurer, has discovered. While over 90% of people in Rajasthan are covered by Aadhaar, which is a 12-digit unique identity number for every Indian, for some reason, hospitals are being allowed to admit patients just on the basis of their IDs — that is, without insisting on live authentication using biometric devices, as is required by regulations — as long as the medical officer of the hospital okays it.
There is no live photographic capture of the patient at both the admission and discharge stages either although the regulations stipulate that this is mandatory. On several occasions in February, for instance, New India wrote to the Rajasthan government to complain about the software still lacking a facility for live photo-capture of policyholders and the fact that biometric authentication was not being implemented.
In addition, while a two-hour window is allowed for the insurance company to approve a claim after the hospital responds to its queries, New India complained that the pre-authorisation was happening in less than two hours — in less than one minute, at times — leaving the company little time to examine whether the hospital’s replies made sense.
New India’s investigators have discovered two types of fraud. One, where the hospital has charged for a more expensive procedure than the one actually carried out; or where no treatment was provided, but a claim was raised. The second type of fraud involved hospitals being empanelled despite not having the requisite facilities, or billing for more patients than they could possibly admit.
One hospital, for instance, had 23 operational beds but showed between 25 and 32 occupied beds based on the claims received. In another case, there were 17 beds but claims were made for up to 25 patients.
On 12 April, to ensure fake claims are at a minimum in NHPS, NITI Aayog ( National Institution for Transforming India) called a meeting with various health secretaries of state governments, insurance companies as well as third-party administrators of insurance schemes. New India’s presentation had many case studies from Rajasthan and said the fact that ‘biometric verification of beneficiary at the time of admission is bypassed’ makes it easy to make fake claims. Interestingly, in the Rajasthan Bhamashah Scheme, tender conditions do not allow removal from the medical insurance panel for fraud.