Vulnerability of Indian Health Insurance Industry to Frauds

The study is to understand the perception of respondents who have an exposure to health insurance by having a policy with respect to frauds and the measures to curtail frauds in health insurance in India. Literature review says ineffective internal controls, insufficient information and tolerance to fraud are major reasons for frauds in the sector. Questionnaire survey in the study reveals that Intermediate fraud and policy holders’ fraud are the predominant ones. Results from the survey reveals that checks on pre authorization requests, proposal call verification, responding to fraud allegations like black listing hospitals and doctors and conducting periodic reviews are the predominant factors which can curtail the possibility of frauds. Another major dimension of the problem is the scope of regulation to control frauds. Insurance companies, agents and brokers come under the preview of the regulator Insurance Regulatory Development Authority but hospitals, doctors and providers of health services are not covered under its net. It is recommended that the regulatory system of the insurance industry needs a more integrated approach like the banking industry.