A way from the glamour of medical insurance cover, an investigation sanctioned by the Uganda Insurers Association (UIA) has uncovered a thriving grand corruption scheme involving hospitals and doctors that has robbed millions of shillings from insurance companies and patients.
The special investigation sponsored by six insurance companies has exposed a string of illicit tactics used by contracted medical facilities to bleed insurance companies.
At least 82 per cent of fraud incidences were recorded inside doctors' rooms at the time of the investigation. Doctors were faulted for facilitating medical fraud by signing onto or approving dubious medical forms.
"When we see doctors facilitating fraud, we worry that the ethical responsibility is getting blurred by financial incentives. These trusted medical professionals have chosen to violate their oaths and put fraud ahead," reads the UIA report.
Dubbed the medical insurance fraud investigation study, UIA contracted Mash Research Africa (MRA) to ascertain the depth and breadth of medical fraud at service provider centres in a bid to reduce fraud and identify strategies to enable growth of medical insurance in Uganda.
Documents seen by The Observer show that six insurance companies pooled resources to facilitate the fraud investigation. These included; ICEA, Jubilee, UAP Old Mutual, Sanlam, Prudential and Liberty insurance. However, every insurance provider was found susceptible to fraud risk since the different medical schemes do not act differently.
The report found that many health insurance claims investigated were fraudulent, and ultimately carried a very high price tag to the insurer, thus distorting the sector greatly. Sources privy to the workings of the scheme intimated to us that insurance companies have been making more losses annually on the medical component and had to look elsewhere to cover up the losses.
For instance, UAP on October 30, 2019, received a medical bill of Shs 2.1bn but a day later on October 31, the bill had climbed to Shs 2.8bn. This represented an increment of Shs 700m in just one day.
UAP has since followed Jubilee insurance in cutting ties with suspect facilities. Jubilee has already terminated 23 hospitals and pharmacies for abusing the system. In a letter dated November 1, Jubilee insurance said the termination takes immediate effect and has highlighted available alternatives for their service.
"Although this action may result into some regrettable inconveniences, it is done in good faith to ensure your benefits are not robbed in the manner the affected facilities have been doing," reads the letter signed by the provider relations officer, John Etayu, and the assistant general manager medical, Dan Musiime.
For a deeper understanding of the fraud, a mystery shopper study was adopted to get culprits. This involved use of mystery customers and impromptu checks done during service delivery to check on fraud incidences and how it manifests at service provider points.
This was aimed at identifying facilities deviating from standard procedure and detect weaknesses in the insurance system that would create vulnerability.
"Enumerators were specifically trained to experience and capture fraud-related activities by acting as patients and reporting their experiences in a detailed and objective way. They recorded their experience on a questionnaire after exiting the outlets so as not to arouse suspicion [from facilities]," the report notes.
To reduce any potential bias, enumerators were rotated across the visiting schedule to check on frontline and medical staff across all functional areas.
KEY FINDINGS
According to the report, the study population was huge but MRA collected data from 126 medical providers that were chosen as a case study. They define fraud as "any intentional act or omission designed to deceive, resulting in the victim suffering from a loss /or the perpetrator achieving a gain."
During the study, more service providers were found to be honest but there were still a few outliers continuously committing low value but cumulatively costing insurance huge losses. Some service providers, whose names have not been declared, that had been victims of fraud in the past had stopped and resisted any attempt to engage in the same.
Out of the 126 medical providers, fraud manifested in at least 41 per cent of the outlets. Highest incidences were recorded in the doctors' room at 82 per cent. Doctors are followed by receptionists with 20 per cent and pharmacists at four per cent.
By region, the central recorded the highest number of fraud cases at 63 per cent, Northern, 14 per cent and Eastern and Western with 12 per cent each. However, the report notes that the likelihood of fraud is highest in the eastern and central regions.
HOW FRAUD MANIFESTS
At medical facilities, fraud is syndicated and done with the knowledge of some key personnel. In some cases, enumerators found that either independent of/or with either receptionists or attendants such as nurses and pharmacists acted as co-conspirators, who worked with doctors to defraud the medical schemes. The easiest form of fraud was collecting medicine for non-card owners. This was high in cases for persons requesting to take medicine for a sick person at home.
"Ultimately, medical service providers end up submitting false claims," reads the study.
Other commonest methods used to defraud insurance companies are; acceptance to offer extra medicine beyond the normal prescription, issuing cards to non-card owners and billing for unnecessary services not permitted by the standard operating procedure.
Collusion with the medical service provider was another indicator of the fraud web. For instance, receptionists were engaging directly with doctors to commit fraud with supervision of nurses to guide them on the process. Pharmacists, on a low scale, seemed skeptical but went ahead to offer services.
In some instances, patients deliberately informed service providers about the intended fraud and the service provider accepted to collude, with or without the doctor's consent.
"Here, the doctor approves services that have not been diagnosed and presents them on the claim form as diagnosed. Members also make requests for extra medicines contrary to the diagnosis and doctors approve it," reads the study.
"[Other] members walk in an outlet and go straight to receptionists to request medicine for non-card members. The receptionists check for the doctor's approval and medicine is given to the card member."
Enumerators found that impersonation or theft of cards was possible where unauthorized personnel would access services by fraudulently using the scheme cards that were not theirs. This, according to the report, went on unnoticed for all schemes and across multiple unsuspecting service providers. In most of the outlets, enumerators asked for medicines for non-insured patients and the service providers willingly provided them.
"We also physically presented other non-card patients to service providers and they were treated. The process involved the investigator using their own cards, sign the claim form, use own fingerprints for the smartcard system while presenting and accompanying to respective departments a different person," the report highlights.
Facilities that accepted to treat non-card owners are; KAYS dentist clinic Kamwokya, UMC Kampala, Lira Medical Centre, Kampala Medical Chambers along Buganda road, Bethany Women's hospital Luzira and Alphine Medical Centre and Ageteraine nursing home in Fort Portal.
The report explains that this type of fraud is, perhaps, a case of lack of control systems on the side of the scheme owners to validate authorized personnel especially for new card owners. On a worrying note, doctors were also seen freely prescribing medicines that patients wanted without any diagnosis. In some instances, such medicines were additional volumes or extra medicine meant for doctors.
This case was evidenced at Ntinda Family Doctor, I-Jay medical centre (Mityana), and Lydda medical services Kyaliwajjala and Eco pharmacy, all in Kampala.
PROFESSIONAL MISCONDUCT
In this study, researchers have also found that there is professional transgression among the facility administrators, erosion of trust as well as the physical risk to patients. Key persons in this are doctors whose level of professionalism is compromised during frauds, especially when they are caught red-handed aiding fraud by providing ideas on how to go about the process.
There were cases where too many medicines were given to patients, maybe, to maximize claims as a result of greed. In one incident, a pharmacist was quoted as saying: "We have given you more because you might have other patients who can benefit from this medicine and we have a lot of it…"
In another incident, a doctor is quoted as saying: "The child is supposed to take 5mls while an adult takes 10mls. If I put here a 5mls dosage, it will be questioned since this card is for an adult. So, I will put 10mls, but when you reach home, please give the child 5mls. The 10mls here is just to disguise so that it is not suspected."
At Case clinic, a client requested for extra medicine for a four-year-old child at home with similar cough and allergies. The doctor, however, said, "…it would be difficult for her to add another prescription on the same form but she wrote the prescription on another Case hospital sheet and asked to get the medicine with cash but not the card."
In facilities, researchers found potential lapses in procedure that could create inconveniences to the client with high chances for fraud. A case in point is the unavailability of the smartcards at points of interface and asking patients to come back later.
"At Rugalama hospital, the doctor attended to me knowing that the reception had closed and she did not have access to the smartcard system. After all the necessary laboratory tests and acquiring the medicine, I was asked to come tomorrow and pick my card," one researcher narrates.
RECOMMENDATIONS
In all these medical frauds, clients can hardly avert them since most of their copies received were faint, giving them no opportunity to see details of the medicine and treatment. This leads to illegal billing of the insurance provider. The report emphasizes a burning need to develop vulnerability and mitigation strategies in the medical insurance sector.
"Safeguards are needed in cases of multiple usage of cards in shorter intervals of time and inability to identify actual users," reads the report adding that multiple visits with cards to numerous outlets in a day went undetected.
Researchers want the use of smartcard systems enhanced with, among others, inclusion of images of the cardholders to help the provider confirm the genuine beneficiaries. In fraud cases involving doctors and other staff, the researchers call for sanctions imposed by the UIA against perpetrators.
Cancelled hospitals, clinics, pharmacies speak out
Eco pharmacy
"Right now Jubilee insurance has temporarily terminated their services with us but we are trying to reach out to them and solve the issue as soon as possible," an Eco pharmacy manager said yesterday.
Kampala hospital
One hospital manager said they are yet to get formal communication from Jubilee.
"We are treating all those allegations as hearsay because we have not got formal communication from Jubilee insurance that they have withdrawn their services from us and we are still treating their clients," one official said.
AAR Health clinic
The clinic confirmed they had been cancelled out a couple of days but were re-instated after discussions. They said Jubilee clients can continue to use AAR health services.
Ntinda Family Doctor clinic
Management said Jubilee terminated their contract indefinitely without prior communication. "We never got any information or summon from them prior to the incident and the announcement went round to very many other organisations without us even getting it first," said Hope Ogwal, the clinic's spokesperson.
Bugoloobi Medical Centre
Dr Peter Kawanguzi said insurance companies had all of the sudden terminated their contracts without prior warning. "We got information that some insurance companies had cancelled their services with us with immediate effect. They should have first warned us because most of them also take long to pay us but we never terminate their contracts abruptly," said Kawanguzi.
UMC Victoria hospital
The hospital said it had no official communication from Jubilee insurance and they are still serving Jubilee insurance clients.
IMC hospital
These confirmed that indeed some of their clinics like the one in Kololo had been cut off by Jubilee insurance for reasons they are yet to establish.
Bethany Women's hospital
The hospital management confirmed the termination but said they are currently ironing out their differences with Jubilee.
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