Defining Fraud and Abuse - Workshop Group 1 Presentation

7/31/2019 Defining Fraud and Abuse - Workshop Group 1 Presentation

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Group IUniversal Definition of Fraud/Abuse/Leakage, key

players in perpetrating fraud, roles controls.

The key purpose is to define exact problem and its rootcause so that it can be effectively addressed


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Fraud Any act committed

with the intent to cheat ,

obtain some benefit or advantage to which they are nototherwise entitled or

someone knowingly denies some benefit that is due andto which some one is entitled


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Abuse

Misuse of position to gain a higher benefit.Overcharging for services that are not required orrendered.


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Specific Contribution in detail to each type

by :-

Sales /marketing team Fraud Abuse LeakagePremium Siphoning

Intentional Non Disclosure

Mis selling

Phantom Policies Assisting/Lobbying andpressuring for fake claims

Impersonation

Kickback

Incomplete Application form


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UnderwritingLapses/Productfeatures

Fraud Abuse Leakage

Accepting Fakedocuments

Collusion andUnderquoting

Backdating

CB leakage due tonon reporting of previous yearsclaims

Different stand by IC on standardexclusions/NonMedicals

Ambiguity in

policy wordings


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Customers Lack

of Awareness/deliberate acts

Fraud Abuse Leakage

Fake claims

Impersonation

Opting tertiary care centre forprimary careservices

Hidinginformation

Incompleteaddress


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Health careProviderPractises

Fraud Abuse Leakage

Fake claims

Inflation

Unbundling of services

Manipulation of bills/diagnosis tosuit theadmissibility

Photo ID


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Fraud -DefinedThe word fraud is not defined in Indian Penal Code; instead what

constitutes doing a thing fraudulently is explained.

The Indian Penal CodeThere is no separate legislation dealing with fraud as in the United Kingdom

or the USA. Fraudulent activities are covered by the Indian Penal on 25defines the expression

fraudulently a person is said to do a thing fraudulently if he does that with intent to defraud but not otherwise. The expression fraudulently occurs in Sections 206, 207, 208, 242, 246, 247, 252, 253, 261, 262, 263 andSections 421 to 424.


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Sections 24 and 23 define expressions dishonestlyand wrongful gain and wrongful loss. Wrongful gain is gain by unlawfulmeans of property which the person gaining is not legally entitled. Wrongful loss is the loss by unlawful means of property to which the person losing it is legally entitled.

Whoever does anything with the intention of causing wrongfulgain to one person or wrongful loss to another person, is said todo that thing dishonestly.


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Indian Penal Code Fraud recognition

Indian Penal Code recognizes the following acts as fraud:a. Impersonationb. Counterfeitingc. Wrong weighing and measurement

d. Misappropriatione. Criminal breach of trustf. Cheatingg. Dishonest dealing in property h. Mischief i. Forgery

j. Falsificationk. Possessing stolen property l. Concealment


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How to contain LeakagesSpeed and efficiency.Exception handling

Establish business rulesIncrease data integrity Data mining.Trend analysis.


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DEFINITION OF FRAUD

Fraud is defined as "any behavior by which one personintends to gain a dishonest advantage over another".In other words , fraud is an act or omission which is intendedto cause wrongful gain to one personand wrongful loss to the other, either by way of concealmentof facts or otherwise.Fraud is defined u/s 421 of the Indian Penal Code and u/s 17

of the Indian Contract Act.

Article Source: http://EzineArticles.com/772623


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Definition of FraudThus essential elements of frauds are:1. There must be a representation and assertion;

2. It must relate to a fact;3. It must be with the knowledge that it is false or without belief in its truth; and4. It must induce another to act upon the assertion

in question or to do or not to do certain act.


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FraudThe suggestions as to the fact ,of that which is nottrue, by one who does not believe it to be true.

Active concealment by one who is havingknowledge of the fact

A promise made with no intention to perform it

Any act fitted to deceiveAct or omission declared by the law to befraudulent


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What constitutes fraud1.False statement of fact2. Active concealment of fact-

a. there is a concealment of factb. it is active in the sense that all efforts made toconceal itc. and it has been made by the party who has the

knowledge of it.Effect voidableRemedy rescind or affirm


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Health insurance fraud is described as an intentional act of deceiving, concealing, or misrepresenting information that results inhealthcare benefits being paid illegimately to an individual or group.Fraud claims are wide-ranging, from misrepresented services,services not rendered and services rendered to 'rented' patients, to abroad spectrum of revenue-enhancement mechanismsThe estimated number of Fraud & Abuse cases in Indian healthcareinsurance is estimated at around 25-40% of total claims.

The main purpose of fraud is financial gain.

As per one report, the healthcare insurance in India may be losingapproximately 1000 crore INR under Fraud & Abuse per annum


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MisrepresentationSec-18 of Indian Contract Act-I. The positive assertion ; in amanner not warranted by the information of personmaking it ,of that which is not true , though he believes itto be true. 2. Any breach of duty which without an intent todeceive ,gains an advantage to the person committing it ,oranyone claiming under him ,by misleading another to hisprejudice or to the prejudice of anyone claiming under him

.3. Causing ,however, innocently a party to an agreement tomake a mistake as to the substance of the thing which isthe subject of the agreement.


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MisrepresentationMisrepresentation is an innocent misstatement of facts positive false statement made without any basis of information ; a breach of duty whichbrings advantage to the person committing it ;inducement of mistake about the subject matterLegal rules for misrepresentation- 1. It must be of

material facts- a mere expression of ones opinionis not a statement of facts


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Thank You

Documents

Defining Fraud and Abuse - Workshop Group 1 Presentation