Running from cover: Why Star Health Insurance is under fire
fraudulent claims.
Insurers have even identified clusters from where fraud claims frequently originate— Surat and Ahmedabad in Gujarat; Faridabad, Gurugram and Palwal in Haryana; Meerut, Kanpur, Lucknow and Unnao in Uttar Pradesh; Pune, Nashik, and Ahmednagar in Maharashtra; and Bengaluru in Karnataka.
The surge in scamming has pushed insurers to leverage artificial intelligence tools, which issue an alert on finding a pattern in potentially fraudulent claims. However, genuine cases also get caught up in this net.
Vikas Mittal, a pharma sales manager based in Meerut, said his claim was rejected by Star Health, which accused him of conniving with the hospital to file a fraudulent claim. “The company did not take any action on my repeated mails and in-person visits for three months. Thereafter, a surveyor visited my home and the hospital where I was treated and found merit in my claim,” he said. Despite this, the company continued to reject his claim. “The staff also misbehaved with me whenever I visited the branch. Finally, I approached Insurance Samadhan and got my claim settled,” said Mittal.
Insurance Samadhan is a grievance redressal platform that helps aggrieved policyholders fight their cases with insurers, for a fee.
In response to queries about this case, Star Health said, “In the case of Vikas Mittal, there were multiple claims raised and we approved ₹2.5 lakh in cashless claims. A few claims of the policyholder were flagged due to concerns like non-submission of discharge summary. Hospital invoices for both insured (husband and wife) were identical and (there were) serious discrepancies in numbering of the receipts, which pointed to possible claims fraud. We had also received suspicious claims from the treating hospital in the past and our fraud detection systems had advised caution.”
Separately, insurers are frustrated by what they term ‘soft fraud’ in the form of inflated medical bills. They claim that such rip-offs by hospitals involve unwanted medical procedures. But that is no reason for them to reject genuine claims, said Mumbaibased cardiac surgeon Dr Prashant Mishra. “I don’t deny that such frauds exist, but insurance companies, especially Star Health, are taking extreme measures. While renewing their contract, they pester smaller hospitals and nursing homes to accept even lower charges even though medical inflation itself has risen to 14%,” he said. “These hospitals do not want to lose out to the competition, so they accept it, but it is not sustainable. Experienced doctors at these hospitals are now refusing to treat patients covered under Star Health and Care Insurance policies.”
Dr Lotwala from Surat said insurance companies demand treatment packages that are on par with the Ayushman Bharat Pradhan Mantri Jan Arogya Yojana (AB PMJAY), which has very low rates. “Not many private hospitals have opted for it (AB PMJAY). Ironically, for similar procedures, insurers settle large claims from big hospitals despite the additional charges but refuse much smaller claims from hospitals located in tier II and tier III cities,” he said.
Industry experts say that the need of the hour is for all the stakeholders to have a constructive dialogue for justified, pre-negotiated tariff packages in line with what the General Insurance Public Sector Association, a group of four stateowned general insurers, offers network hospitals.
Experts also point out that policyholders cannot wait for the industry to find a solution. Policyholders have to make a full disclosure while buying a policy and have to be cautious while filing claims, and insurers, too, need to match that by becoming transparent in their dealings, they said.
From the policyholder’s perspective, some experts believe it is better to choose a reliable intermediary who can help with claims settlement. “When customers approach insurers directly, they talk emotionally or aggressively,” said Sanjay Aggarwal, co-founder and legal head of Insurance Samadhan. “Insurers do not entertain emotions. You need to speak to them in legal language to make your point.”
Experts say that the need of the hour is pre-negotiated tariffs, in line with what the General Insurance Public Sector Association offers network hospitals.