CONTROLLING FRAUD AND
ABUSE IN HEALTH
INSURANCE
INVESTIGATING AGENCIES
PERSPECTIVE
Dr. Rajendra S. Bangal
MBBS, MD (Forensic Medicine), DNB (Legal Medicine), LL.B.
EXPERT MEDICOLEGAL CONSULTANCY PVT. LTD.
ROAD BLOCKS IN VERIFICATION:
At Hospitals
 Non-cooperation by hospital owner in
individual owned hospitals
 No access in corporate hospitals
 Delay in providing documents
 The charges are not fixed and depend from
patient to patient.
 Hospital pharmacy does not share the
computerized data and stock register.
 Hospitalizations on weekends (in case of
cashless cases)
 Unaccounted expenses
 Non-cooperation of certain agencies like
school/ colleges, Employer – hence the
delay.
 Rude behavior by hospital owners/
consultants
 Cannot control kick backs, excessive and
unnecessary investigations
ROAD BLOCKS IN VERIFICATION:
With insured
 Refuse to give statements in writing
 It is not possible to meet the unreasonable
expectations of ICs which are also bad in
law.
 Neighbors do not provide statements.
ROAD BLOCKS IN VERIFICATION:
With Physicians




Some doctors charge for giving statements.
They refuse to come face to face.
Non-availability of doctors
Rude behavior
ROAD BLOCKS IN VERIFICATION:
With ICs
 Authorization of patients not sent to
verification agencies.
 Policy T &C, Type of policy, details given
by the patient in the proposal form is not
made available.
 Impracticable TATs.
ROAD BLOCKS IN VERIFICATION:
Solutions
 ICs should take cognizance of the
grievances of verification agencies.
 They should have a mechanism to take
strict action against the defaulters.
 The investigators should be given an
authority and instructions to hospitals to
honour their authority.
Pan India Presence




Criteria for selection of vendors.
Feasibility of PAN India agencies.
Assurance of volume.
Effectiveness of regional and zonal
agencies vis a vis so called Pan India
agencies
Ways to carry out investigations
INVESTIGATION ACTIVITIES
 PRE INVESTIGATION
 FIELD INVESTIGATION
 POST INVESTIGATION
PRE INVESTIGATIONS
 Peruse records thoroughly
 Immediately note down the discrepancies
 Prepare general plan of action for
investigations
 No place should be required to be visited
twice- unless for follow up
PRE INVESTIGATIONS (Contd…)
 Note down all contact numbers with names
required for reference during field
investigation
 Note plan of action and visitation on single
sheet
 Plan of investigations
 All points should be covered
 Scope of investigations
PRE INVESTIGATIONS
 Peruse claim documents and note details








Duration between policy and claim
Address
Age
Spacing of policies
Occupation/ license
Medical documentation
Habits
Hobbies etc.
FIELD INVESTIGATION
 Before commencing, peruse the plan of action
and plan of visitation
 Make a visit to the place of occurrence
 Take photographs
 Do not take short cuts while investigating
FIELD INVESTIGATION (contd …)
 Never ignore any additional information as
unwanted
 Get available verifiable documents and
additional information verified for its
authenticity.
 In case of a lady name, get her maiden name.
 Take all facts, statements in writing
FIELD INVESTIGATION (contd …)
 Never leave work for next day.
 Do not assume / deduce a fact or document to
be true/ false on your own. Get it verified.
 Do not automatically discredit information
that is unfavorable to your position.
 Do not assume non cooperation (Noncooperation comes only where vested interests
are involved.)
FIELD INVESTIGATION
 Meet other doctors and chemists in neighboring
areas of the treating doctor/ hospital.
 Meet chemists near hospital, also pathology labs
in the vicinity
 If record not available with chemist near hospital,
go to chemist near his residence
 Also enquire with relatives, friends, colleagues,
neighbors etc
 Ask the nurse, peruse nursing notes
 What was the cause? Do you have any knowledge
about his cause of death ?
POST INVESTIGATION
 Logical conclusion of investigation
 Report to be in sequence of events
 In simple language
 Record multiple visits if done
 Place all relevant evidence on record-
including contact numbers.
POST INVESTIGATION (contd…)
 Filing to be neat and proper
 Send hard as well as soft copies
 Index all contents in the report
 If information to be obtained at a later date-
mention so.
POST INVESTIGATION
 Mention locality of the claimant’s residence.
 Hospital- residence distance
 Chemist- residence distance
 Medical history details
 Age proof
 Occupation
 Income and Source of income
 Habits/ hobbies
POINTS TO BE KEPT IN MIND







Do your homework.
Documentation should be in detail
Always make check list for reference
Be polite but firm
Do not apply short cuts
Be thorough
Keep all necessary items required for
investigations (tape, carbon paper, camera, pen
etc.)
POINTS TO BE KEPT IN MIND
 Bring evidence in support
 Do not ignore additional information
 First go to the opposite side where the insured
lives
 Ask open ended questions
 Ask close ended questions only when we need
to confirm facts
 Remember to collect facts
Claimant’s Interview
 Meet only if necessary
 Meet him in the end
 Be very polite but firm
 Ask only relevant questions
 Check for delay in date of death and
intimation to the insurer.
 Look for its reasons
 Try to get more than 2 age proofs.
Age Proof
 PAN Card/ Ration Card should not be
collected as proof for age.
 Instead voter’s list (preferably state list) can
help.
 How much should be the age difference for it
to be significant:
 If age is >60 years: Then upto 7 years
 If age is <60 years: Then not more than 10 years
 Never commit claim decision to the claimant





to obtain documents
Take photographs of Life Assured and
nominee
Take notice of living standard of nominee
Interview lady member in presence of some
adult family member and record his/ her name.
Discretely interview children
Get details of his/ her mediclaim policies.
REMEMBER
 Be thorough, polite, firm and alert
 Collect all relevant documents
 Do not leave any point unattended
 Check the records and take the verification in
writing
 No need to obtain documents if already
submitted to the company.
 Details of family and dependents with age
 Statement of spouse, colleagues, relatives,
doctor etc. (preferably in their own
handwriting)
 Any other relevant details
 TELE-CALLING
 Hospitalization verification
 Investigations before authorization
 Investigations for PED in planned surgeries.
 Investigations after claims are lodged.
 Audit based investigations – getting triggers
from audits (TPA oriented audits, hospital
oriented audits)
PATIENT VERIFICATION AT THE
TIME OF CASHLESS APPROVAL
Effectiveness of cashless verification.
Sr.No
Total No of claim
Verified
Total Presumptive
Saving
Average presumptive
saving per Claim
560
20,575,546
36,742
1
Category
PATIENT WAS NOT
ADMITTED
2
Exorbitant
3233
43,357,227
13,411
3
Not co-operative
138
889,515
6,446
4
Room Rent
420
4,820,055
11,476
5
Pre-existing Aliments
Pregnancy related
Expenses
272
2,247,468
8,263
63
189,000
3,000
4686
72,078,812
15,382
6
HOSPITALIZATION VERIFICATION STATISTICS DURING
PERIOD 1-1-2011 TO 31-12-2011.
ROI
REPRESENTATIVE FIGURES OF A GROUP
POLICY
TOTAL
FRAUDS
CASES
DETECTE
INVESTIGA
D
TED
368
CLAIM
VALUE
PRESUMPTIVE
SAVING PER
CLAIM
110 3227058
29337
ROI = 19.55 TIMES
INVESTM
ENT PER
CLAIM
1500
USE OF TECHNOLOGY
 Permissions required.
 CCTV permissions required for CCTV, Ham
radio, walkie talkie- Ministry of
telecommunication.
Sec 415 IPC
 Whoever,
by
deceiving
any
person,
fraudulently or dishonestly induces the person
so deceived to deliver any property to any
person, or to consent that any person shall
retain any property, or intentionally induces
the person so deceived to do or omit to do
anything which he would not do omit if he
were not so deceived, and which act or
omission causes or is likely to cause damage or
harm to that person in body, mind, reputation
or property, is said to "cheat".
Explanation
 A dishonest concealment of facts is deception
within the meaning of this section.
Sec 463 IPC- Forgery
 Whoever makes any false documents or false
electronic record or part of a document or
electronic record, with intent to cause damage
or injury, to the public or to any person, or to
support any claim or title, or to cause any
person to part with property, or to enter into
any express or implied contract, or with intent
to commit fraud or that fraud may be
committed, commits forgery.
Sec 464 IPC- Making a false document
 A person is said to make a false document or false
electronic record who dishonestly or fraudulently (a)
makes, signs, seals or executes a document or part of a
document; (b) makes or transmits any electronic record or
part of any electronic record; (c) affixes any digital
signature on any electronic record; (d) makes any mark
denoting the execution of a document or the authenticity of
the digital signature,
 with the intention of causing it to be believed that such
document or part of document, electronic record or digital
signature was made, signed, sealed, executed, transmitted
or affixed by or by the authority of a person by whom or by
whose authority he knows that it was not made, signed,
sealed, executed or affixed.
Sec 468 IPC- Forgery for purpose
of cheating
 Whoever commits forgery, intending that
the document or Electronic Record forged
shall be used for the purpose of cheating, shall
be punished with imprisonment of either
description for a term which may extend to
seven years, and shall also be liable to fine.
Sec 471 IPC: Using as genuine a
forged document or electronic record
 Whoever fraudulently or dishonestly uses as
genuine any document or electronic record
which he knows or has reason to believe to be
a forged document or electronic record, shall
be punished in the same manner as if he had
forged such document or electronic record.
Sec 191 IPC: Giving false evidence
 Whoever, being legally bound by an oath or
by an express provision of law to state the
truth, or being bound by law to make a
declaration upon any subject, makes any
statement which is false, and which he either
knows or believes to be false or does not
believe to be true, is said to give false
evidence.

Explanation 1
 A statement is within the meaning of this section, whether
it is made verbally or otherwise.
Explanation 2
 A false statement as to the belief of the person attesting is
within the meaning of this section, and a person may be
guilty of giving false evidence by stating that he believes a
thing which he does not believe, as well as by stating that
he knows a thing which he does not know.
Sec 197 IPC: Issuing or signing false
certificate
 Whoever issues or signs any certificate
required by law to be given or signed, or
relating to any fact of which such certificate is
by law admissible in evidence, knowing or
believing that such certificate is false in any
material point, shall be punished in the same
manner as if he gave false evidence.
Sec 198 IPC: Using as true a certificate
known to be false
 Whoever corruptly uses or attempts to use any
such certificate as a true certificate, knowing
the same to be false in any material point,
shall be punished in the same manner as if he
gave false evidence.

Sec 199 IPC: False statement made in
declaration which is by law receivable as evidence
 Whoever, in any declaration made or subscribed by
him, which declaration any Court of Justice, or any
public servant or other person, is bound or authorized
by law to receive as evidence of any fact, makes any
statement which is false, and which he either knows or
believes to be false or does not believe to be true,
touching any point material to the object for which the
declaration is made or used, shall be punished in the
same manner as if he gave false evidence.
Sec 201 IPC: Causing disappearance of
evidence of offence, or giving false information to screen
offender
 Whoever, knowing or having reason to believe that an
offence has been committed, causes any evidence of the
commission of that offence to disappear, with the intention
of screening the offender from legal punishment, or with
that intention gives any information respecting the offence
which he knows or believes to be false:
 If capital offence
: 7 years
 Punishable with life imprisonment : 3 years
 punishable with less than ten years’ imprisonment : 1/4th part of
the imprisonment
Sec 205 IPC: False personation for purpose of
act or proceeding in suit or prosecution
 Whoever falsely personates another, and in
such assumed character makes any admission
or statement, or confesses judgment, or causes
any process to be issued or becomes bail or
security, or does any other act in any suit or
criminal prosecution, shall be punished with
imprisonment of either description for a term
which may extend to three years or with fine,
or with both
Sec 17 Contracts act: Fraud
 "Fraud" means and includes any of the following acts
committed by a party to a contract, or with his connivance,
or by his agents, with intent to deceive another party
thereto his agent, or to induce him to enter into the
contract;
 (1) the suggestion as a fact, of that which is not true, by one who





does not believe it to be true;
(2) the active concealment of a fact by one having knowledge or
belief of the fact;
(3) a promise made without any intention of performing it;
(4) any other act fitted to deceive;
(5) any such act or omission as the law specially declares to be
fraudulent.
 Explanation.—Mere silence as to facts
likely to affect the willingness of a person
to enter into a contract is not fraud, unless
the circumstances of the case are such that,
regard being had to them, it is the duty of
the person keeping silence to speak, or
unless his silence, is, in itself, equivalent to
speech.
TRAINING MODULE FOR
INVESTIGATION- An Insight
 Claim Investigation: Enquiry into
unfamiliar and questionable issues
ATRIBUTES OF AN INVESTIGATOR
 Inquisitive
 Observant
 Focused
 Openminded
 Curious
 Perseverant
 Persistent
 Good Mannered
ATRIBUTES OF AN INVESTIGATOR
 Good Listening Skills
 Unbiased mind
 Unprejudiced mind
 Ability to play role
 Ability to put people at ease
 Ability to obtain other’s cooperation
 Ability to reach a logical conclusion
INVESTIGATION IS NOT ONLY
ABOUT
 Collecting Documents
 Verifying Facts
INVESTIGATION IS ABOUT
 Thorough enquiry into the matter
 Systematic planning of investigation
 Triggering an investigation
 Identify red flags
 Create Hypothesis (what could have happened)
 Scrutinize the investigating agency
 Should walk away with positive evidence
 Collate the data obtained.
REMEMBER
 Try to inculcate talent to identify fraud at all
levels (continuous nurturing is necessary)
 There is no secret recipe for cracking a fraud
 To find facts that are not mentioned while
taking the policy
 Identify the facts and details which do not
allow people to cheat the insurance company
 Try to prove al manipulated cases as negative
(and not to prove genuine cases as negative)
 To gather evidence to back our conclusion.
INVESTIGATION ACTIVITIES
 PRE INVESTIGATION
 FIELD INVESTIGATION
 POST INVESTIGATION
PRE INVESTIGATIONS
 Peruse records thoroughly
 Immediately note down the discrepancies
 Prepare general plan of action for
investigations
 No place should be required to be visited
twice- unless for follow up
PRE INVESTIGATIONS (Contd…)
 Note down all contact numbers with names
required for reference during field
investigation
 Note plan of action and visitation on single
sheet
 Plan of investigations
 All points should be covered
 Scope of investigations
PRE INVESTIGATIONS
 Peruse claim documents and note details








Duration between policy and claim
Address
Age
Spacing of policies
Occupation/ license
Medical documentation
Habits
Hobbies etc.
FIELD INVESTIGATION
 Before commencing, peruse the plan of action
and plan of visitation
 Make a visit to the place of occurrence
 Take photographs
 Do not take short cuts while investigating
FIELD INVESTIGATION (contd …)
 Never ignore any additional information as
unwanted
 Get available verifiable documents and
additional information verified for its
authenticity.
 In case of a lady name, get her maiden name.
 Take all facts, statements in writing
FIELD INVESTIGATION (contd …)
 Never leave work for next day.
 Do not assume / deduce a fact or document to
be true/ false on your own. Get it verified.
 Do not automatically discredit information
that is unfavorable to your position.
 Do not assume non cooperation (Noncooperation comes only where vested interests
are involved.)
FIELD INVESTIGATION
 Meet other doctors and chemists in neighboring
areas of the treating doctor/ hospital.
 Meet chemists near hospital, also pathology labs
in the vicinity
 If record not available with chemist near hospital,
go to chemist near his residence
 Also enquire with relatives, friends, colleagues,
neighbors etc
 Ask the nurse, peruse nursing notes
 What was the cause? Do you have any knowledge
about his cause of death ?
POST INVESTIGATION
 Logical conclusion of investigation
 Report to be in sequence of events
 In simple language
 Record multiple visits if done
 Place all relevant evidence on record-
including contact numbers.
POST INVESTIGATION (contd…)
 Filing to be neat and proper
 Send hard as well as soft copies
 Index all contents in the report
 If information to be obtained at a later date-
mention so.
POST INVESTIGATION
 Mention locality of the claimant’s residence.
 Hospital- residence distance
 Chemist- residence distance
 Medical history details
 Age proof
 Occupation
 Income and Source of income
 Habits/ hobbies
POINTS TO BE KEPT IN MIND







Do your homework.
Documentation should be in detail
Always make check list for reference
Be polite but firm
Do not apply short cuts
Be thorough
Keep all necessary items required for
investigations (tape, carbon paper, camera, pen
etc.)
POINTS TO BE KEPT IN MIND
 Bring evidence in support
 Do not ignore additional information
 First go to the opposite side where the insured
lives
 Ask open ended questions
 Ask close ended questions only when we need
to confirm facts
 Remember to collect facts
Claimant’s Interview
 Meet only if necessary
 Meet him in the end
 Be very polite but firm
 Ask only relevant questions
 Check for delay in date of death and
intimation to the insurer.
 Look for its reasons
 Try to get more than 2 age proofs.
Age Proof
 PAN Card/ Ration Card should not be
collected as proof for age.
 Instead voter’s list (preferably state list) can
help.
 How much should be the age difference for it
to be significant:
 If age is >60 years: Then upto 7 years
 If age is <60 years: Then not more than 10 years
 Never commit claim decision to the claimant





to obtain documents
Take photographs of Life Assured and
nominee
Take notice of living standard of nominee
Interview lady member in presence of some
adult family member and record his/ her name.
Discretely interview children
Get details of his/ her mediclaim policies.
REMEMBER
 Be thorough, polite, firm and alert
 Collect all relevant documents
 Do not leave any point unattended
 Check the records and take the verification in
writing
 No need to obtain documents if already
submitted to the company.
 Details of family and dependents with age
 Statement of spouse, colleagues, relatives,
doctor etc. (preferably in their own
handwriting)
 Any other relevant details
TYPES OF DEATH
 NATURAL
 UNNATURAL
 Suicides
 Homicides
 Accidents
In Homicides
 FIR
 PM Report
 CA Report
 Copy of charge-sheet
 Statements
 Court Evidence
 Confirm possibility of claimant’s involvement
in murder
In Suicides
 FIR
 PM Report
 CA Report
 News Paper Cutting
Death due to Burns
 Dying declaration
 Statement given to attending doctor
 Time since death
 Postmortem report
Traffic Accidents
 Spot Panchanama
 Who was driving the vehicle
Alcoholic Deaths
 Acute
 Chronic
 Photograph of deceased, show it to wine shop/
bar.
 Ask frequency and quantity of purchase
 Enquire with de-addiction center
 Psychiatric hospitals
Drowning
 Visit place of occurrence
 Enquire with surrounding shops/ houses/
hawkers etc
VARIOUS PROFORMAS
Provided separately