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Fraudulent Health Insurance Claims - Dealing with Fraud

Written by Dr. Sameer Sippy | Medically Reviewed by The Medindia Medical Review Team  on Apr 19, 2013
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Dealing with Fraud

Methods of dealing with Insurance Frauds

Legal Enquiry

A legal route is initiated to deal with frauds being committed in Insurance sector. A fraud committed in Insurance sector is treated as both a civil and a criminal offence under law and the guilty individual can be punished under both the aforesaid offences. Such a fraud is also treated as a white-collar crime. Examples of white collar crime in insurance sector include insider trading, insurance fraud, tax fraud, securities and investment fraud, and identity theft.

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Electronic Transactions

Electronic Transactions are currently being devised to overcome fraudulent Health Insurance Claims. E-transactions are in the process of coming up with the authorization approval process until the revenue accrual process becomes electronic in nature.

Already IBM India has commenced online claim management solutions. In turn, this would lead to a maturing of the Revenue Cycle Management Business. On account of this development process, the speed of online processing operations will introduce a greater transparency with regards to the management of claims and their speedy settlement.

SAS software

Also called SAS (Statistical Analysis System), this specialized software is being implemented in the market to deal with frauds in Insurance sector.

Benefits of SAS software include:

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  • Fraud Detection and Alert Management
  • Systematic detection of any sort of suspicious activity
  • Generation of alerts from multiple monitoring systems
  • Alert Prioritization
  • Fraud scoring engine

Implications of Fraudulent claims

  • It is treated as an offence under both civil and criminal laws.
  • The person is stripped of the benefits of insurance policy cover.
  • The person is sentenced to rigorous imprisonment. The duration of imprisonment varies from nation to nation.
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  • A heavy financial fine is levied on the guilty individual.
  • It has definite implications on the economy of the country.
  • Increase in the number of fraudulent claims leaves the insurance sector bleeding and this in turn has an impact on the financial institutions of the country and subsequently impacts the economy.
  • Instead of an upward graph, there is a downward slide observed in case of increase in number of fraudulent cases during a particular period.
  • Instead of a blooming and a rosy economy, the economy becomes dark and gloomy on account of selfish motives by certain citizens of the country.

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