Recent reports show that the claims paid out by the National Hospital Insurance Fund (NHIF) have increased significantly over the past few years. In-patient claims paid out to health providers last stood at Sh14 billion, compared with Sh12 billion in 2016-2017.
Outpatient claims also increased to Sh7.5 billion compared to Sh5 billion the previous financial year, while the free maternity programme saw NHIF pay out Sh1.5 billion compared to Sh 28 million the previous year.
These figures are huge by any standard and can be interpreted in two different ways. One could argue that NHIF is at the forefront of making a reality one of the Big Four agenda items – affordable health.
In other words, more and higher payouts to health providers may mean that more and more Kenyans are getting better and affordable health services through the State health insurer.
The second interpretation is more sceptical and assumes that a good chunk of the medical claims from the health providers is fraudulent. This is not too far-fetched, since it is on record that the NHIF has been investigating this challenge.
NOT JUST AN NHIF PROBLEM
Launching fraudulent insurance claims is not restricted to NHIF, but is a well-known problem across the insurance industry. Whether it is motor vehicle, life, accident or whatever insurance policy one may take, the process of faking claims is fairly simple.
In the health insurance sector, one fraudulent approach is to inflate the cost of drugs for a bona fide patient. Basically, record that a patient took a higher volume or more expensive drugs even when he or she was actually on the cheaper generics.
Another approach is to claim the in-patient spent a month in the hospital, when in actual fact the patient spent a week or less. Alternatively, one could submit a genuine claim with the correct entries but execute it twice – the first time immediately after discharge followed six months later by replaying the same claim.
Of course there are ICT systems in place aimed at mitigating or reducing the risks around fraudulent claims. But these systems are scattered and isolated across the stakeholders, making it difficult to pick out fake claims from the genuine ones.
If a fake claim has all the valid signatories from Hospital X and is sent to NHIF for payments, there is very little NHIF can do from its end to investigate and block the payment.
Additionally, scrupulous insiders within NHIF itself can massage and inflate valid claims with a view to making and sharing out the personal gain with the scrupulous health providers.
ANTI-FRAUD ICT SYSTEM
Insurance fraud is probably the biggest white-collar theft in Kenya but gets very little attention, because it exploits inherent weaknesses arising from the existing client-server- based insurance ICT solutions.
Client-server solutions place trust in a single, central entity – the custodian of the health and claim records. This presents a single point of failure in the overall security design of the system.
There is an urgent need to overhaul and redesign our health insurance ICT systems in order to eliminate the need to trust the single entity appointed to participate or oversee insurance claims.
The new ICT systems should instead assume all the participants are likely to misbehave with the funds and therefore it is designed from scratch to resist fraud.
All participants in the system – insurers, health providers, patients, doctors, pharmacists and lab-techs, among others – should be mandated to update a single shared ledger, even though each does so independently.
APPROPRIATE LEVELS OF ACCESS
The system should also allow each participant appropriate levels of access such that a patient should be able to electronically sign off on most of the critical claim transactions. In addition, patient should be able to access and see all the claims previously launched by the health provider on their accounts.
Insurers will also be in a better position to block fraudulent claims, because they can tell from the transactions entered directly by the pharmacists whether indeed a particular patient was served with a particular prescription as claimed.
The system would be designed to ensure that any transaction that eventually gets committed to the shared ledger is automatically verified and validated by at least a majority of the participants, as opposed to a single entity.
With such a system in place, we can then make a better judgment on whether the billions NHIF is forking out to health providers is a sign that Kenyans are becoming healthier by the year.
Before then, your guess is as good as mine.
Mr Walubengo is a lecturer at Multimedia University of Kenya, Faculty of Computing and IT. Email: [email protected], Twitter: @Jwalu