The FINANCIAL — What do excessive medical service, deliberate damage of an insured car, falsification of documents and unnecessarily ‘urgent’ operations all have in common? They are all types of insurance scams in which policyholders and doctors in Georgia are involved. It is exactly these insurance fraud cases that are the most common in Georgia.
Insurance fraud is not recorded in Georgia, so no one knows the exact number of such cases in the country. Experts say however that the insurance fraud rate is still problematic for insurance companies even though decreasing trends have been observed.
“Despite the fact that there are still lots of insurance fraud cases in Georgia, their number is decreasing. As mediation services work efficiently over time such cases will be more regulated than they are today,” said Tamuna Tskitishvili, Head of the Sales Department at IC Group.
“When a doctor tries to provide a patient with less costly treatment but inflates the expenses to the insurance company dishonestly, that is not necessarily fraud to me. More likely it is a case of the doctor trying to somehow help the patient who is his/her relative or friend. There are other cases of fraud, like excessive medical service. Or for example, an individual insuring a car then deliberately breaking it to get much more money from the insurance company than they would have done by selling the vehicle. Such cases increase the loss indicators of an insurance company,” she added.
A fraud scheme works in the following way: to get more profit people who are insured come up with different fraudulent ideas to simulate damage of some sort. If the insurance company does not have stringent control mechanisms, it can be easy to take advantage of. So in such cases the insurance company pays for no reason and runs its business at a loss.
“Deception of an insurance company is not considered a shameful act in the world, but it is certainly not honourable; regardless, the insurance company works on a trust basis with its clients,” said Devi Khechinashvili, Head of the Georgian Insurance Association. He admits that such a ‘trust basis’ often leads to losses for the insurance companies.
“Out of every 100 operations 60 of them are classed as ‘urgent’. This is an incredible number as it cannot be possible to perform emergency surgery for more than 20 percent. Asides from fraud another reason for frequent ‘urgent’ operations can be the generally low level of preventive care in the country. In spite of the increased number of preventive care cases, people are still lazy about visiting the doctor until a problem has become fairly serious. The most serious fraud is when doctors falsely carry out an operation on an ‘urgent’ basis. Immoral doctors prefer such emergency operations as they are more expensive, involve less planning and give more profit to the clinic,” said Devi Khechinashvili.
“There are also cases of people using someone else’s ID card and name to assume the identity of someone who is part of the state insurance programme and then pretending that they are the one who is insured. In such a way the self-appointed ‘insured patient’ can undergo an otherwise costly operation. This is falsification of documents, which is a criminal offence. Sometimes doctors sell additional services to patients. The research proves that there is a high number of cases of excessive drug use and over-prescription of expensive medicines. The doctors are dealing with pharmacy companies and get compensation from them according to medicine sales. This is illegal but many doctors are entrepreneurs and in fact get entrepreneurial income in such a way. One solution is for insurance companies to improve the identification of insured people so as to avoid the falsification of documents,” he added.
“Cases of insurance fraud were more frequent about three years ago than they are now,” said Nana Shonia, Irao. “Among them auto insurance fraud was the most frequent at Irao. We tightened our control and that is why the number of similar incidents has decreased. Our company has never suffered loss as a result of insurance fraud,” she added.