Insurers are turning to technology to combat healthcare fraud in response to a rising number of deceptions in recent years, explains Dr Simon Peck
A few years ago, the concept of fraud in UK healthcare was almost unheard of. Statements by doctors or healthcare providers were taken on trust.
But that changed with the introduction of Financial Services Authority (FSA) regulation which requires all insurers to have in place systems to investigate and tackle fraud. Similarly, the NHS has set up the NHS Counter Fraud and Security Management Service (CFSMS), which has confirmed that, just as in other areas, there is fraud in the healthcare sector.
Fraud benefits no one except the fraudster as it takes money that should have been spent on healthcare and inflates insurance premiums.
In the US it is estimated that up to 15% of healthcare expenditure is lost to fraud.
While the figure is not thought to be as high in the UK it is nonetheless significant. And the losers are the honest majority, with every pound lost to fraud ultimately paid for by consumers.
Nurse auditors
In late 2003, Axa PPP Healthcare decided to investigate in depth the extent of fraudulent billing.
The firm set up a team of nurse auditors who, with consent from its policyholders, visited hospitals across the UK and traced several hundred claims back to original medical records. The conclusion was clear.
Most providers were honest but a small but not insignificant number were obtaining funds to which they had no entitlement.
Some evidence of this was found in most of the hospitals visited and in many cases hospital staff confided in us that they had had at least some suspicions.
The ways in which it was discovered that inappropriate funds had been obtained included doctors charging for more complex treatment than that actually given or charging for extras that were not provided; charging several times for the same service or charging for component parts of an operation as if they were extra; and doctors making false statements about the medical history or of the actual operation performed, or omission of important information.
Included in the latter were cases in which doctors were suspected of having used medical jargon to mislead claims assessors.
For example, a consultant told a claims assessor he was performing an operation known as a laparoscopic obliteration of the lumen of the fallopian tubes which has an OPCS code Q3800 - in plain language, a sterilisation. This is excluded from most medical insurers' cover.
The information may have been technically true but the manner in which it had been provided was clearly intended to mislead, which arguably amounts to obtaining funding by deception. And this view is shared.
Counter-fraud
The Fraud Bill currently going through Parliament will create a new criminal offence of fraud by abuse of position in addition to new offences of fraud by false representation and fraud by omission.
As a result of the assessment, it was decided to set up a full-time counter-fraud and audit team.
A cross-industry counter-fraud group was also set up to formalise the sharing of information and intelligence among insurers.
In 2004, as part of that group, insurers signed a memorandum of understanding with the NHS CFSMS, under the terms of which information could also be exchanged with the NHS.
The consequences of committing insurance fraud can be very serious. As a matter of policy, many firms decline to accept any further claims for treatment by any provider who has submitted fraudulent claims.
In addition, details of cases are shared with the NHS CFSMS and with other insurers under section 29 of the Data Protection Act 1998.
Doctors committing fraud also risk being removed from the medical register and a number of prosecutions under criminal law in the near future are on the cards.
Other costs include the reputations of the independent healthcare sector and of the medical profession, which suffer every time such cases become known.
This does no favours to the vast majority of honest practitioners who strive to act in the best interests of their patients.
There is much to be proud of in the private healthcare sector, but the industry's reputation is easily damaged by the misbehaviour of the few and the regrettable culture of tolerance that allows this to continue.
All firms stand to lose if the public perceives that fraud is a feature of private medical practice.
These problems can be easily avoided. All doctors have the right to set their own fees, to agree these with their patients and to receive payment for those services at the agreed rate.
Similarly, insurers have a right as part of their contract with policyholders to set rules and benefits and a financial duty to put in place measures to limit liability.
Thankfully, in most cases customers' polices cover the claims they make.
Criminal offence
What most commonly gets doctors into trouble is trying to make the insurer pay for something not included in the customer's contract.
Some may genuinely believe they are helping their patients.
Some are simply lining their own pockets. But, in either case, they are committing a criminal offence.
Many specialists will have experienced a difficult patient who puts pressure on them to mislead their insurance company.
This can be difficult to resist but specialists should never be tempted to go down this road.
Although the customer risks cancellation of their policy, it is the doctor who risks paying the higher price as they cease to be recognised by one or more insurance companies.
Avoiding problems is really very simple - doctors just need to ensure they are always honest and transparent in their dealings with patients and insurers.
Simon Peck is head of provider audit and information at Axa PPP HealthcareC
Test cases: The £70,000 fraud
Mr A was a clinical practitioner not recognised by Axa PPP Healthcare. He submitted bills for consultations and MRI scans using the names of a number of bona fide doctors. A claims assessor became suspicious and referred the claim for investigation. It showed that a number of doctors' names had been used without their consent for billing purposes and the scans invoiced as MRI scans were not MRI scans but were a much less complex investigation. Axa PPP Healthcare recovered the entire £70,000 which had been paid. Mr A was reported to his professional association and struck off.
Dr B was a surgeon with a significant private practice. Axa PPP Healthcare became suspicious about an unusual pattern of transactions and a much higher than normal rate of operations. A number of claims were investigated and it was discovered that claims had been made for services which had not been carried out. In addition, services not covered by Axa PPP Healthcare's insurance policies had been invoiced using codes for procedures that were covered. Several thousand pounds were recovered from the doctor and the matter was reported to the General Medical Council. The doctor did not attend the hearing and his name was erased from the medical register.
