Health insurance fraud on the increase warn experts

WEDNESDAY, SEPTEMBER 14: Crooked health insurance claims have increased since the recession hit Bermuda, one of Bermuda’s major insurance firms said yesterday.

Michelle Brock Jackson, executive vice president of group insurance at Argus said: “We have seen an increase the number of people attempting to collect payment on fraudulent medical claims.”

But she warned: “Argus has a highly-skilled, experienced team of claims professionals who recognise ‘red flags’ on potentially fraudulent claims and investigate these claims.

“We also have up to date fraud detection software integrated into our claims processing system.”

Ms Brock Jackson was speaking only days after a Sri Lankan accountant admitted stealing nearly $70,000 through fraudulent claims submitted to insurance company BF&M.

Crooked claims

Chadima Gangula Arachchige, 36, last week pleaded guilty in Magistrates’ Court to three charges of dishonestly claiming more than $68,000 from the firm and trying to obtain a further sum of nearly $14,000.

Arachchige, who worked at car and bike sales firm HWP, claimed for surgery in hospitals in Sri Lanka on three occasions between February and November last year.

She also submitted a further claim in May this year, claiming almost $14,000.

Arachchige had submitted documents bearing the letterheads of the hospitals and said she had paid for the medical treatment out of her own pocket while overseas.

But BF&M became suspicious and contacted the hospitals in Sri Lanka, which had not record of the treatment. Immigration records showed that Arachchige was in Bermuda when the first two operations were said to have taken place.

Records also showed she had left Bermuda on May 18 – only days after she had claimed to have had surgery in Sri Lanka.

Police arrested Arachchige on August 20 at the airport – after she had been notified that BF&M were looking into her previous claims.

Officers found she was in possession of a one way ticket to Sri Lanka. They also discovered that her home in Bermuda had been cleared of all her belongings and that her bank accounts had been emptied.

Arachchige, of Woodland Road, Pembroke, who originally pleaded not guilty to the charges, changed her plea to guilty on all counts. She will be sentenced on September 21.

Holly Flook, vice president of BF&M Insurance, said recent US figures suggested between three and 15 per cent of insurance claims in America were fraudulent – although she could not say what the corresponding figures were in Bermuda.

She added: “At this time, an increase in fraudulent health claims activity has not been noticed.”

The firm declined to comment on security measures to prevent fraudulent claims.

Ms Brock Jackson, although she was also unable to provide fraud figures, said: “Fraud is a problem for all health insurers. In the United States billions of dollars are spent annually on fraudulent medical claims.”

She added that fraud can be attempted both by individuals and providers of medical services like doctors.

Ms Brock Jackson said: “Some people see committing medical fraud as a victimless crime. However, every incident of fraud increases medical costs and we all pay the price for this crime in the form of higher premiums.”

Ms Brock Jackson said that Argus insists on original claims and receipts because unscrupulous claimants can try to alter documents to bump up the cost.

She added that patients could do their bit to fight fraud by reviewing “explanation of benefit” forms from insurance companies to ensure they received all the treatments claimed for.

She added: “If you suspect that a provider has charged you for services that you did not receive or if you have any questions on the bill paid by your insurance company, call your provider and ask for an explanation.”

No one from Colonial Insurance could be contacted for comment yesterday.