With PMI fraud hitting the headlines, Nicola Culley investigates the size of the problem.
The cost in the UK is at the lower end of this range. According to Keoghs Solicitors, a firm specialising in claims-related services to insurers, PMI fraud in the UK sits at between 3% and 5% of cases.
Peck says, while it is a problem to be tackled, there is no evidence of it increasing, due to FSA/FCA regulations and the focus the industry has given it.
He adds: “I see no evidence of it increasing; in fact, my perception is that we have probably reduced the problem. In any group of people, only a small number are dishonest. Many more go along with the prevailing culture, and our work on developing an anti-fraud culture within our industry has clearly changed behaviour.
“I do not believe that fraud is a driver of inflation: it is, however, a cost to the industry; it does of course add to premiums; and we need to continue with our work to ensure that we minimise it.”
He notes that all healthcare systems around the world are facing a dilemma, with increasing technology and treatment becoming available that threatened to outstrip society’s ability to pay for it.
“This remains the most important factor in the rising cost of healthcare, not just in UK PMI, but in every healthcare system in the world,” Peck stresses.
Simon Winnard, appointed as director of healthcare fraud at Keoghs Solicitors in May, says UK fraudulent activity in PMI of 3% to 5% may sound small, but it is significant given tight margins in the sector.
He says insurers are currently finding it hard to manage premium costs that continue to spiral, and paying for significant fraudulent claims is added pressure for the sector.
He explains: “There is a big proportion of fraud among treatment providers, where consultants claim for treatments that have not been carried out. They are a small part of the picture, but they can have a significant impact on the industry.”
Bundling and up-cutting
Winnard describes two particular types of fraud: bundling and up-cutting. The former could be a patient billing for a knee operation with a debridement (the medical removal of dead, damaged, or infected tissue) when just one was done.
The latter involves consultants sending costs for more complex procedures than have actually been done.