'Zero tolerance' policy as Daman fights fraud

Top medical insurer unveils plans to hunt dishonest claimants and declares a "zero tolerance" policy on fraudulent claims.

Staff working at the medical investigation department at Daman National Health Care Company's head office in Abu Dhabi.

ABU DHABI // Daman, the country's largest insurer, yesterday declared a "zero tolerance" policy on fraudulent claims, saying it has reclaimed Dh6 million (US$1.6m) from clinics for bogus treatments so far this year. More than half of the money reclaimed over the past 11 months came from a single dental practice, which investigators found had been submitting fake claims.

"We have zero tolerance for this," said the company's chairman, Khaled al Qubaisi, in announcing its latest plans to combat fraud. He said anyone caught breaking the rules would be prosecuted. "Even if the case is small we will deal with it immediately, otherwise it could grow into a bigger problem," he said. The insurer plans to double the number of staff in its medical investigations unit and install an electronic system costing several million dollars that would spot any anomalies in claims, he added.

Because fraud and abuse raise Daman's costs, they ultimately push up premiums. The insurer, which was created in September 2005 and now handles up to 700,000 claims each month, has the authority to pursue civil cases against healthcare providers suspected of committing fraud. It uses a number of means to identify and stop providers and patients from abusing the system. These include random inspections of patient files, correspondence with patients and scrutinising a percentage of claims every month. It also sends undercover patients to hospitals, clinics and pharmacies.

"This year we have recovered Dh6 million," Mr al Qubaisi said. "This was from 91 cases we opened and investigated. Our aim is to stop fraud and abuse altogether. It is similar to stealing." Fraud could include, for example, a physician invoicing Daman for a test that was never performed, or claiming for a more expensive procedure than the one that was actually done. It can also occur in pharmacies, Mr al Qubaisi said, when a pharmacist agrees to give a patient an item not covered by insurance - such as a shampoo or cosmetics - instead of the item listed on the prescription.

Dr Michael Bitzer, the chief executive of Daman, said healthcare providers committing fraud would be caught sooner or later. "It is inevitable," he said. Dr Bitzer said the insurer would soon be introducing a computer programme to check every claim against 35,000 points, looking for contradictions in medicines being prescribed for a patient, or conflicts in treatments, and any patterns in treatment numbers.

"It will check treatments to see if any claims are for things which are forbidden or against any medical school," he said. "We will also analyse the whole database and see what could be potential triggers for fraud." The cost of introducing the system could be several million dollars, Dr Bitzer said. It will replace part of the work done manually by the medical investigation unit. It will also be a way of further limiting the opportunities for health providers to commit fraud, he said.

"There are two parts to our business," he said. "The first is the insurance part when we pay out of our pocket. The second is Thiqa [a health card for nationals]. We manage this for the Government of Abu Dhabi and manage the money as a third party. "As the guardian of someone else's money you almost have to be more tough than with your own money." A 10-strong team in the unit is trained to look for anomalies in claims. Daman will be doubling the staffing early next year.

The insurer has the power to access patient files to verify that a claim for treatment or medicine matches the information in the file. If it identifies fraud it can take a number of measures starting at issuing notifications or warning letters. Removing a provider from the Daman network, which Dr Bitzer said was the "toughest approach" it had, means patients holding health insurance cards cannot claim for the services it offers.

As Daman has around 80 per cent of the market in the capital and about 1,300 providers in its networks, it would dramatically cut the potential market of a clinic if it were no longer able to deal with the insurer. Daman will also try to recoup the money and will pass a file to the Health Authority-Abu Dhabi, which has the power to investigate further and suspend or revoke licences if it deems it necessary. It could, in theory, also pass details to the public prosecution if a crime has been committed.

Daman also operates the Thiqa health insurance programme for Emiratis as a third party administrator. It handles the claims but uses money from the Government to repay providers. Emiratis are entitled by law to free health care but in February the health authority cut the dental entitlement from 100 per cent to 50 per cent in private clinics after discovering a number of fraudulent practices. Thiqa has about 500,000 members.

One of the widely accepted problems with the UAE health system is the lack of a primary healthcare culture. In some countries insurance companies have more rules about when claims can be made and will not pay out for an appointment with a specialist if it was not a referral from a GP, for example. Daman does not operate such a system. There are certain limits such as pre-authorisation requirements for some treatments and annual limits, which can be as high as Dh5 million per premium. This means, in theory, a patient could visit five different doctors in one day, each time getting prescriptions for expensive medications. This would be an abuse of the system. Dr Bitzer said it did not necessarily have a negative impact on Daman's business but could be something the company would consider in the future.

"It is about product design," he explained. "Maybe we would do it one day, but the healthcare system here is not designed for that." [e-mail]