Health insurance claims in Rajasthan under the government’s Bhamashah Swashthya Bima Yojana have shot up dramatically, from Rs 7.5 crore in the first week — the current scheme began on December 13, 2017 — to Rs 20.3 crore in the 17th week, taking the current claims ratio to around 70% already (see graphic). Based on current trends, the ratio for the full year could be as high as 120% despite the fact that the premium charged rose 3.4 times since last year. In 2015-16, the first year of the scheme, the claims ratio was 90% — claims of Rs 320.7 crore were made against the premium of Rs 357.4 crore — and this went up to 176% in 2016-17.
The high claims ensured the premium charged per family rose almost 3.5 times, from Rs 370 in the first two years to Rs 1,263 at the moment. The central government’s National Health Protection Scheme (NHPS), likely to be rolled out soon, is based on the Bhamashah model. Neither officials of the Rajasthan government or of the insurance company — New India Assurance — responded to email queries on the scheme and its problems.
What is probably at the heart of the problem is the rising incidence of fraudulent claims that New India has discovered. While over 90% of people in Rajasthan are covered by Aadhaar, 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 long as the medical officer of the hospital okays it. Clause 1.13.4 of the request for proposal (RfP) is clear that “identification of the patient as far as possible will be done using Aadhaar-linked biometrics”.
There is no live photograph capture of the patient at both the admission and discharge stage taking place either — Clause 126.96.36.199 of the RfP says this is mandatory. On several occasions in February, for instance, New India wrote to the Rajasthan government to complain about the software still not having a provision for live photo-capture of beneficiaries though this was part of the RfP and also the fact that biometric authentication was not being done.
Indeed, 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 while actually conducting a cheaper one; or where no treatment was done, 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 between 21 and 25 patients claimed. A third hospital had 31 beds but 36-55 patients supposedly admitted on most days. New India has testimonials of patients — in writing and on video — detailing these false claims. In some cases, individuals were paid a fixed amount and claims made in their names despite no procedures being carried out. In one case, laparoscopic adhesiolysis (Rs 13,000), fissurectomy (Rs 7,000) and laparoscopic appendectomy (Rs 10,000) was claimed though the patient has said no operations were conducted.
In one of show-cause notices to hospitals for fraud, New India said a laser surgery costing Rs 50,000 was billed for while a knife-surgery costing Rs 24,000 was performed, and, as evidence, it cited the fact that the patient had a surgery mark that wouldn’t be there in a laser surgery. The hospital replied that while laser surgery had been done, the patient had accumulated fluid and so a tube was inserted — which is where the surgery mark came from — to drain the fluid. New India wrote back to say that this seemed a cover-up since the claim documents never spoke of any accumulation of fluid or the need to do any procedure to drain this out — “this seems an afterthought to cover up the case”.
On April 12, to ensure fake claims are at a minimum in NHPS, NITI Aayog 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. It also pointed out that, despite the agreement, the tender conditions favour hospitals and “hospitals get free way to perform frauds without strong actions against such acts”.
It pointed out that “in Rajasthan Bhamashah Scheme, tender conditions do not allow debarring a hospital for fraud”. It also talked of how, though hospitals were forbidden from charging patients, this was happening and while insurance firms could report this to the authorities, they were forbidden from taking any direct action against the hospital.
On its part, United India Insurance gave examples from the Rashtriya Swasthya Bima Yojana (RSBY) which included fake bills where no treatments were done, charging patients while the law forbids this, unnecessary surgeries — it also stressed the need for the insurer to have the power to de-empanel hospitals, biometric authentication and live photographs of the beneficiaries.