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Fraud Rocks Teachers Medical Insurance As 16 Providers Axed

by Health Business
January 14, 2017
in Government, Politics & Policy, Public Health, Technology
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Fraud Rocks Teachers Medical Insurance As 16 Providers Axed
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Medical insurance provider AONKenyasays it has severed links with 16 medical providers due to fraud-related activities.

The firm’s deputy managing director Sammy Muthui said they struck off the list the providers, which it did not name, for engaging in malpractices under the Teachers Medical Scheme”.

The move, he said, saved the insurer over Sh50 million. AON is the medical insurance provider of tutors employed by the Teachers Service Commission (TSC).

Mr Muthui said some of the affected facilities invoiced exorbitant levies while others provided treatment to non-beneficiaries, with the expectation of receiving illegal payments from the scheme.

The move comes in the wake of mounting reports that employees of healthcare providers and those of insurance companies could be colluding in making fraudulent claims.

Recently, Insurance Regulatory Authority (IRA) chief executive Sammy Makove summoned insurers to a crisis meeting to discuss how to curb the vice.

“Medical insurance has become the biggest class ofbusinessin the last few years in terms of growth. However, we have seen the class making losses,” said Mr Makove. Suspected fraud and inflated medical costs saw claims rise to Sh12.3 billion in 2014 from Sh9 billion in 2013, according to data from the regulator.

AONKenyasaid the 16 were delisted after failing to implement adequate corrective measures to curb the menace.

Mr Muthui said the providers exploited the generous benefits under the scheme and the AON Information Technology infrastructure system, which allows for self-registration of teachers and immediate access to medical care by members without waiting periods.

An internal assessment commissioned by the insurance firm and completed last month found that there was massive fraud and overcharging from some medical providers.

“Fraud, misuse and overuse by members and service providers has led to the removal of some service providers from the scheme panel,” said the audit report which also established that many scheme members called for inclusion of high cost hospitals.

“Requests for inclusion of higher level/higher cost facilities also drove the scheme costs up,” said the insurance firm.

The inclusion of some high-end facilities in turn led to congestion at certain preferred facilities. Teachers ignore hospitals in their home counties andtravelto major urban centres for medical care.

TSC extended its scheme with AON early July by three months to allow it undertake a procurement process for a service scheme provider for the next period of cover, as per the law.

There has been growing consensus in the industry that fraud, more so in the medical class of insurance, has evolved into organised crime.

The amount of cash involved in insurance fraud more than tripled while the frequency of the crime rose by nearly 22 per cent in 2015 even as experts say this is just the tip of the iceberg.

According to IRA report, Sh366.9 million was involved compared to Sh102.76 million the previous year. The amount was 0.7 per cent of the total claims.

“The amount involved aggregated to Sh366.9 million increasing from Sh102.76 reported in 2014. However, this represents 0.7 per cent of the total claims incurred under general insurancebusiness,” said the IRA.

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Health Business

Health Business contains need-to-know features, news and case studies that explain the administrative and commercial issues affecting healthcare and hospital management. Health Business supports several high profile exhibitions - coverage of which is always timed for maximum impact. Regular topics include ICT, Finance/Funding, Facilities Management, Security, Health & Safety. Contributors range from government ministers through to top-level health administrators and association chairs.

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