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At a tribunal hearing at the General Medical Council's West End headquarters this week, the health insurance industry chalked up a major victory against one of its biggest headaches.
The GMC had looked at the case of private doctor Sethna Saverymuttu after four health insurers claimed was fiddling his books.
The insurers said Saverymuttu, who practised in Chelmsford, had repeatedly bumped up his income by invoicing them for operations that were far more complex — and expensive — that those he had actually performed.
This week, the GMC said it agreed with their claim, and suspended Saverymuttu from working in the UK for a year.
As a result, the health insurers may get some of their money back, but that will be peanuts for this multi-million-pound industry. The big victory it is celebrating is the deterrent effect.
“Whenever a doctor is struck off or sanctioned by GMC for defrauding insurance firms, it raises the profile of our anti-fraud work and sends out a warning to other medical practitioners that we will take action,” says Tracy Kellaway, spokesman for The Health Insurance Counter Fraud Group.
That the group was set up, in 2008, shows just how seriously the industry is tackling fraud-related losses. They cost insurers about £140 million a year and add more than 5% to the cost of every policyholder's premium.
So the giants of the private medical insurance industry, including Bupa, Axa PPP, Aviva and PruHealth, pooled their intelligence in an attempt to reduce fraud rates.
The initiative, supported by the Association of British Insurers, City of London Police and the Financial Services Authority, has so far led to four doctors being struck off or sanctioned at the GMC.
“The momentum is now building,” says Kellaway. “This is tens of millions of pounds worth of fraud we're talking about. We don't want policyholders to be funding these costs.”
The insurers are battling against healthcare fraud on several fronts. One of the most common routes is “upcoding”, as in Saverymuttu's case, where doctors bill insurers for a more complex procedure than they undertook. Over-treatment, where doctors charge for treatments that were not medically necessary, is another type.
It is not just doctors who fiddle the books. Kellaway points out that patients often fail to declare conditions and claim for treatment — sometimes days after taking out a policy. Insurers say patients try to disguise fertility courses, which are often not included in policies, as gynaecological treatment.
Claims for cosmetic surgery, dressed up as a medically necessary procedure, are also on the rise. One insurer noticed a doctor billing for an unusual number of hernia treatments. An investigation revealed the patients were actually undergoing tummy tucks — the doctor offered patients who couldn't afford the surgery the chance to subsidise it by putting through the paperwork for a hernia op on insurance.
The HICFG has also spotted insurance brokerages engaging in fraud. In one case a broker was found to be regularly understating the risk of new corporate clients by more than £100,000, so the health insurers grossly underpriced their policies.
But the trend is nowhere near as bad as it is the US, where healthcare fraud is an epidemic costing insurers up to $300 billion a year, and the HICFG wants to keep it that way.
“The group means that insurers can pool their fraud concerns, so suspicions can be raised quicker,” Kellaway explains. “All the health insurers now have groups of investigators working on counter-fraud, and a lot of cases are referred through whistle-blowing from other doctors, nurses, as well as people phoning the Insurance Fraud Bureau's Cheatline.”
Last year, Axa PPP, Britain's second-biggest health insurer, identified fraudulent claims that totalled £1.8 million.
“We've had a lot of support from doctors and medical groups about our work; the crackdown is working,” adds Kellaway. “There's still more to do. We're looking to extend our partnership network of insurers across the world to make it tougher for fraudulent doctors to move abroad to practice, for example. But the message is getting out there — health insurance fraud is being tackled.”
