Insurance Companies in Uganda are at war with several hospitals and medical facilities over what they have termed as theft or fraud in the medical and health insurance policies.
Major insurance companies have terminated their medical/health insurance policies with some hospitals/ health facilities saying they are conniving with patients to defraud them.
Jubilee Insurance was the first firm to notify its customers on November 1, who, hold Jubilee Medical Insurance Cards, that it was terminating services with 23 hospitals in Kampala and the surrounding areas.
In a statement that Jubilee Insurance issued to that effect, the company said: “Although this action may result into some regrettable inconveniences, it is done in good faith to ensure your beneficiaries are not robbed in the manner the affected facilities have been doing.”
UAP Old Mutual has also followed suit, notifying 30 hospitals, medical clinics and health centres that the service has been terminated with immediate effect.
How the Fraud has been Happening
A source within the Insurance Industry told EABW Digital News that these hospitals have been treating uninsured people using cards of those insured.
“They have been converting benefits and give cash to employees of the insured company from their cards.
“For example, one would go with a card which has Ush30 million worth of treatment fees. They agree to give ‘the patient’ money in cash of around Ush5 million then, ‘the patient’ signs on their card that they have received treatment worth Ush20 million which is claimed back by the hospitals from insurance companies,” said a source who preferred anonymity.
The source added that the hospitals/medical facilities would go ahead to forge documents that ‘a patient’ was admitted say for a month yet, in truth, that person had never been admitted in that facility.
“Some hospitals were giving too much and unnecessary medicine to the patients all in the name of increasing the costs,” the source added.
However, Dr Mukuzi Muhereza the Secretary-General of the Uganda Medical Association said in Kampala that there is no fraud done by hospitals or any medical facility.
“What they do is to put a markup on their fees. Insurance companies take a very long time to pay. Some take up to six months or 1 year before clearing the medical bills hence our facilities to put a markup.
“This is meant to cater for the long period taken without paying for the bills,” said Muhereza.
According to Faith Ekudu, the Spokesperson of Uganda Insurers’ Association (UIA) in a fraud survey they conducted, they found that hospitals submit fictitious claims and bills to insurance companies for clearance.
“Uganda Insurers’ Association says while fraud affects all business lines in the insurance sector, it has been increasingly prevalent in the medical class of business.
“The fraud is done in various ways; including collusion between the medical policyholders and health service providers, inflated bills from hospitals and clinics, hospitals making patients take unnecessary tests, impersonation or dual membership by policyholders and pharmacy-related fraud,” said Ekudu.
Ekudu added that some hospitals were found to apply two-tier pricing for their services.
“This happens when patients who present medical insurance cards are charged more than those who pay cash for the same service,” she said.
Statistics from the Insurance Regulatory Authority
According to the 2018 Insurance Regulatory Authority (IRA) report, medical insurance uptake is one of the fast-paced segment of insurance in Uganda – now the largest class of business by corporate institutions.
Its gross written premium grew by 26.96% from USh161b in 2017 to USh204.05b in 2018.
Big blow to Uganda’s proposed National Health Insurance Scheme
In June this year, the government of Uganda approved the National Health Insurance Scheme Bill, which the government thought will improve the provision and access of health services to Ugandans.
The scheme is intended to facilitate the provision of accessible, affordable, acceptable and quality healthcare services to citizens irrespective of their age, economic, health and social status.
In the government’s thinking, the National Health Insurance Scheme will also help to develop health insurance as a complementary mechanism of healthcare financing and ensure efficiency in healthcare services.
It also targets to ensure that residents have access to equitable, affordable and quality healthcare services.
However, with the emerging fraud in the sector and eventual withdraw of insurance companies, the National Health Insurance Scheme may face a major setback if something is not done to arrest the situation.
“If passed into law, It shall make it mandatory for every Ugandan above 18 years to pay for the National health insurance,” Ofwono Opondo, the Government of Uganda Spokesperson said of the National Health Insurance Scheme Bill.
The Scheme involves saving and depositing money with an insurance company such that when one is sick, they can receive health services without picking money from their pockets.
It is also meant to be implemented in an integrated approach through social and private community-based health insurance schemes.
“Government also hopes that through this scheme, it will be able to mobilize funds to subsidize the cost of provision of healthcare services to the population and the indigents in particular and be in position to promote social protection by protecting households from catastrophic health expenditures (impoverishing payments incurred when they access health services,” said Opondo.
Currently, over 41% of expenditure on health services is out of pocket expenditure by households while 42% is spent by donors and the government only contributes 15 % of the total expenditure.
What the Bill stipulates
According to the bill, each individual above the age of 18 years shall be required to remit a certain amount of money to the National Health insurance scheme and acquire an insurance card.
Once it is approved, civil servants and formally employed Ugandans will be required to contribute 4 per cent of their gross salary.
The employers will top up with 4 per cent to make 8 per cent as the monthly contributions towards the scheme.
No specific amount has been set but it will depend on one’s earnings.
A card can be used by the individual remitting the money, their spouses and children. If both spouses are employed, both shall be required to remit to the scheme.
It is also hoped that this scheme would be implemented on the principles of solidarity in that those exempted from the payment also benefit.
BY PAUL TENTENA