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Medical fraud in Singapore is one of the reasons why your premiums increase
Medical fraud in Singapore is an ongoing issue. In December 2016, the Singapore Medical Council announced a new rule for medical care providers that stated they would no longer be able to share a percentage of the fees paid to third party agents in exchange for patient referrals. Despite this, a number of complaints concerning alleged inflated insurance claims among doctors, physiotherapist, and medical concierge companies have been received by the Ministry of Health (MOH) recently.
Medical fraud in Singapore 2018
The issue of medical fraud in Singapore has become a focus again after dodgy practices related to patient referral schemes and fee-sharing resurfaced for the first time since the introduction of the 2016 rules. This time, the MOH is investigating claims that industry professionals are inflating the costs of health services provided to patients in order to increase the money paid out under insurance.
Unnecessary referrals and false claims are the key complaints and the main factors for medical fraud in Singapore. Doctors and physios, as well as insurance agents and other third-party administrators (such as medical concierge companies), are now under the microscope as investigators consider whether referral schemes fees and services rendered are being misrepresented in insurance claims being made by patients.
For example, some medical doctors are alleged to be being paid commission fees of 20-30% of a physiotherapy bill if they refer their patients to certain private physiotherapy clinics. These clinics then upsell the physiotherapy packages to the patients, which are paid for by their insurance. Packages of 10 treatments are alleged to be being sold to people who may only need half that amount to successfully recover.
Concierge firms are similarly believed to be receiving kickbacks for signing clients to their service and directing them to specific healthcare providers. Those providers then sign off on a range of services rendered, some of which may not have been given, and the concierge companies arrange all of the patient’s insurance details so that the false claims aren’t noticed.
How medical frauds in Singapore issue affect my premiums?
Rising insurance premiums are always a concern for consumers and patients around the world and in Singapore, and the costs of insurance can be exacerbated by acts of fraud within the system.
Unnecessary referrals and procedures, misdiagnosing patients to justify additional costs and false claims for services end up costing insurance companies millions, and possibly billions, which put pressure on their businesses to make up the shortfall from their customers.
While individual insurance policies take into account your personal information (such as age, weight, and health conditions), overall shifts in profitability for insurance companies also plays a part in how much you pay when you buy a new policy or renew an old one.
In addition to profitability impacts, the costs of combating fraud are also factored into the operating costs of insurance and, eventually, your annual premium costs. From IT systems, investigative staff, and increased regulation by government offices to help curb fraud, the costs of finding and deterring fraudulent practices are a constant challenge for the industry.
How big is the problem of medical insurance fraud?
The 2018 edition of our Cost of Health Insurance report shows that the challenge of medical fraud globally is one of the four main reasons behind premium increases. This trend has not changed since the first report we issued in 2015.
According to the Reinsurance Group of America (RGA), around 3.58% of all global insurance claims are identified as fraudulent. Asia, in particular, is the region with the highest percentage of deceitful claims at approximately 4%. Of all of the fraudulent insurance claims submitted, the RGA reports that 24% can be attributed to health benefits.
MOH has already taken action against medical fraud in Singapore, by working with insurance companies on medical fees benchmarking. This move is set not only to aid doctors and patients be clearer about medical costs but also helps insurance companies to identify reasonable reimbursement rates for treatments. In the long term, this may even lead to a decrease of premiums, since insurers will be able to “predict” the amount they need to pay for claims.
Can I trust an insurance broker in Singapore?
Brokers don’t benefit financially from your medical visits
Most, if not all, insurance brokers work under a commission arrangement with the providers themselves. Unless they’re offering extra services beyond the sale of an insurance plan, you can trust that your broker is likely not receiving kickbacks from the medical services you use.
Their priority is on their clients, not providers
When you renew your policy, brokers get compensated for that too. It’s in a broker’s best interest to keep their clients happy with the plan, benefits, and insurer they provided. If you’re not receiving quality and honest services, you have plenty of other brokerage options available in the market.
Self-governing insurance associations
One way to ascertain whether or not a broker is legitimate is to check with local Singaporean industry bodies that work to ensure those in the market are reputable and trustworthy. This includes groups such as the Monetary Authority of Singapore (MAS), and the General Insurance Association of Singapore, which is part of MAS, among other groups and associations.
Independent vs captured agents
Something to be aware of when engaging an insurance broker is to find out whether or not they’re an independent broker, or whether they’re contracted to sell the plans of one or a few particular insurance providers. Independent brokers can work with any provider in the market, which gives them an added layer of autonomy when it comes to sourcing plans and servicing their clients. Captured agents may put a greater priority on keeping their contracted insurers happy.
Why choose Pacific Prime Singapore?
With so many options in Singapore, it can be difficult to know which one is right for you. Going directly to the insurer is often actually not cheaper than using an agent, and with some agents, you’ll get so much more than just an insurance policy sold to you. Pacific Prime Singapore, in fact, offers a business model that is based on using our great relationship with insurers as an independent broker to always be of advantage to the clients we serve.
Our in-depth knowledge of the types of plans available in the market, and our experience in meeting the needs of a diverse range of clients, making us the number one choice for international private medical insurance products for both expat and high net-worth locals living in Singapore.
We’ve been in the market for almost 20 years, and our experienced insurance consultants will give you independent and unbiased advice about plans and service providers in Singapore. Contact our team today, and let us simplify insurance for you.
Jantra curates and reports on the results of Pacific Prime’s monthly newsletters, as well as manages Pacific Prime’s Deputy Global CEO’s LinkedIn posts. Complemented by her background in business writing, Jantra’s passion for health, insurance, and employee benefits helps her create engaging content - no matter how complex the subject is.
Growing up as a third-culture kid has given her a multicultural perspective that helps her relate to expats and their families while 8 years of working remotely have given her unique insight into hybrid work arrangements and enthusiasm for employee benefits.
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