HEALTH INSURERS PLAN DATABASE TO CHECK FRAUD CLAIMS

HEALTH INSURERS PLAN DATABASE TO CHECK FRAUD CLAIMS

It is intersting to read in The Economic Times about Insurers Data Base to be set up
According to this nes item health claim data of individuals/families will be compiled for being used by the Health Insurance companies.

My viewpoint is that Health Insurance has been a bleeding portfolio for not because of individuals but because of group policies, which are being picked up by the Insurance Companies at low premiums for achieving the targets .These targets are set up for managers and branches at unrealistic levels.We recently came across a case study where the premium quoted for a group by 3 different co's was Rs 6.50 lakh to Rs. 8.00 lakh.

Then suddenly someone from 4 th Insurance company appears and picks up the policy for Rs 4.00 lakhs.One does not realise how the underwriter of this company calculated that Rs. 4 lakhs is the reasonable and acceptable premium.

Let us come to the news item which appeared as follows;

Faced with mounting losses as claims exceed premium income, health insurers are looking at setting up a shared database of fraudulent claimants and those with pre-existing health conditions. Insurance companies feel that plugging leakages caused by unethical claims would help reduce losses.

Although data on fraudulent claims are absent, insurers say their experience points to several instances of inflated claims. They say such frauds are possible because of poor regulation of health-care service providers. "Industry- level discussions on the subject are already under way," said Anuj Gulati, director, services and business development, ICICI Lombard General Insurance.

Besides inflated claims, non-disclosure of pre-existing illnesses is a major concern for the industry, whose claims payout is estimated to be 130 percent of the premiums collected.

Once a database is in place, insurers can identify frauds if they move from one company to another. "The centralised database would help insurers plug the leakages and also offer inputs for taking more informed decisions while underwriting risks. The discussions are still on at the industry-level and there is a long way to go before it (database) takes definite shape," said Gulati.

Adds Antony Jacob, CEO, Apollo-DKV Insurance Company, "Formation of such a repository — whenever it takes shape — will certainly be welcome. Access to claims and exposure data pertaining to the Indian health market as a whole will be available to health insurers, helping them analyse the data in a meaningful way by using analytical tools while pricing new products and re-pricing existing ones."

In the long run, a central database will also be useful for policyholders, as it will facilitate portability of health insurance. "Some companies may be extremely cautious while acquiring other insurers' customers due to difficulty in underwriting without adequate data to compute the risks. Therefore, a repository giving health insurance companies selective access to proposers' claims history will help in appropriate pricing of the policy, benefiting the customers as well as health insurers," said Gulati


My comment on this news item is
"Let us compile the data of group policies first ,control the claims of group policies first and then move to the creation of the database of the individuals"