Health insurance sector fraud in the country is on the rise with a study by the Board of Health Care Funders of Southern Africa (BHF) showing 40 percent of claims paid by heath insurance firms being fraudulent in nature.
According to Medical Aid Society of Malawi (Masm) chief executive officer Sydney Chikoti the industry is now losing over K1 billion a year due to fraud.
He said Masm has not been spared the vice citing cases where fraudsters collude with service providers to get cash and in turn the service the provider claims from Masm as if the member accessed medical care.
“In some cases a member will lend out his or her card to let a relation access medical care,” he said.
Chikoti said although the firm has been constantly working to finding new ways of combating the malpractice, cases of fraud are still rampant.
“Previously we only gave members membership cards to our clients and in the last two years we brought in the photo ID cards to cut this malpractice. Although we have these measures in place, collusion between service providers and members is still taking place.
“However, we are continuously working on putting in place measures to curb this malpractice,” he explained.
Currently, there is no public social health insurance system operating in the country. Private health insurance exists, but to a small degree largely due to the State provision of free health care and financing of health services, and in part due to the high levels of poverty.
However, in recent years private health insurance has become an important element of health financing.
But experts warn that gains made by insurers such as Masm might be eroded due a rise in health insurance fraud.
Masm business development facility director Gabriel Kamanga concurs that fraud remains a challenge to Malawi as evidenced by past and recent cases in which over K 1 billion is lost due to fraud.
“We cannot escape the fact that these wounds will take many years to heal and cost the innocent hence it is necessary to find solutions to avoid such occurrences.
“It highly risky to grow such an economy like this, not only at professional level but also at business and national levels because corporate fraud is connected to social–economic well-being of the population and effects are visibly long-term,” he said.
Similarly, the Malawi’s 2013 National Integrity System Assessment Report which was funded by the UK’s Department for International Development but produced by African Institute of Corporate Citizenship, Malawi Economic Justice Network and Transparency International noted the businesses faced by numerous fraud and corruption related issues.